Personal-Finance

New unit trusts invite options

2016-05-01 06:51

Four new funds have been launched for longer-term investors with investment horizons of five or more years. Neesa Moodley reviews the latest additions to the industry

10X Prime High Equity Fund

Towards the end of last year, 10X Investments brought its first unit trust product to the market in the shape of the 10X Prime High Equity Fund, which is a balanced fund.

In line with its low-cost model, the 10X Prime High Equity Fund offers one of the lowest fee structures on the market.

Including platform and advice fees, the average unit trust in South Africa (for an asset allocation fund) costs about 2.5% a year (excluding VAT), according to research. In comparison, the 10X Unit Trust fee is 0.5% a year (excluding VAT). This fee is calculated as a percentage of an individual’s investment value and includes investment management, administration and reporting.

In the event that an investor elects to use a financial adviser or broker, 10X permits an advice fee of up to 1% a year (excluding VAT).

The 10X Prime High Equity Fund has no initial fee, no administration fee and no termination or unit trust exit fee.

The 10X Prime High Equity Fund has exposure to multiple asset classes, including South African equities, international equities (developed and emerging markets), local property shares, local government and inflation-linked bonds, and local and
offshore cash.

Minimum lump sum investment

R5 000

Minimum monthly investment

R1 000

Novare Mayibentsha Growth Retail Fund of Hedge Funds

Novare has launched South Africa’s first retail hedge funds, including the Novare Mayibentsha Growth Retail Fund of Hedge Funds.

Rene Miles, managing director of Novare Collective Investments Schemes, says the fund aims to achieve moderate capital growth with reasonable levels of income, while keeping capital preservation in mind.

Miles says it will invest in a broad range of participatory interests and other forms of participation in collective investment schemes. However, investments will be allocated to a minimum of six portfolios, with a maximum of 30% allocated to a single portfolio.

While the fund portfolio does not apply leverage, the underlying portfolios may.

Minimum lump sum investment

R50 000

Minimum monthly investment

R1 000

Colourfield BCI Smart Equity Fund

Smart beta investing seems to be the latest trend this year in the investment universe and Colourfield Liability Solutions launched a unit trust fund this month that not only uses the smart beta investing approach, but also the Swix (JSE/FTSE shareholder weighted index), as its benchmark.

Costa Economou, chief executive of Colourfield Liability Solutions, says this is the first unit trust fund the company has launched. It uses a smart beta investment strategy, which is an investment strategy that is said to fill the void between active and passive investing by tracking an index not just through the size of the companies but through a range of alternative methodologies.

As a high equity fund, this investment is best suited to aggressive investors or investors who have a long investment timeline, such as 10 to 40 years. Its primary objective is to achieve high capital growth.

This fund invests in equity securities, preference shares, property shares and property-related securities listed on exchanges, money market instruments and assets in liquid form. The fund manager is Colourfield’s chief investment officer, Dr Nick Sennett.

Minimum lump sum investment

R10 000

Minimum monthly investment

R1 000

Investec Worldwide Flexible Fund

Launched earlier this year, this fund is suitable for investors with an appetite for capital and income growth.

It’s for discretionary savers, especially those looking for sources of returns beyond balanced funds, which have to stick to Regulation 28. This limits the funds to a maximum exposure to equities of 75% and offshore exposure to 25%. The Flexible Fund provides a solution for investors seeking offshore exposure with minimised volatility.

The fund can be seen as an extension of the already proven Investec Balanced strategy, which harnesses the firm’s best ideas from multiple local and global strategies.

However, the unconstrained geographic element gives this worldwide flexible fund access to a greater opportunity set than that available to Regulation 28-limited balanced funds. The fund, therefore, has the potential to deliver a higher return at similar risk to typical balanced funds.

In order to achieve this, the fund has complete flexibility across all asset classes and the geographies so, at any given time, the fund could have all its holdings in offshore, or everything in local assets.

Minimum lump sum investment

R10 000

Minimum monthly investment

R500


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