Collective Investment Schemes
The facts on Collective investment portfolios
A collective investment portfolio is a collective investment that enables you to pool your money with other investors who have similar investment objectives.
Classification of South African regulated collective investment portfolios
Equity funds are collective investment portfolios that invest predominantly in shares listed on the Johannesburg Stock Exchange. These funds invest a minimum of 75% of the market value of the fund in equities at all times and generally seek maximum capital appreciation as their primary goal.
Everything you need to know about collective investment portfolio fees and charge
Trying to determine how much you'll pay to purchase or sell units in a collective investment portfolio fund may seem quite confusing at first, especially when you are confronted with NAV prices, initial fees, exit fees and just recently, multiple classes of units.
The Total Expense Ratio or 'TEr'
The TER of a portfolio is a measure of the fund’s assets that have been sacrificed as payment for services rendered in the management of the fund. TER’s are expressed as a percentage of the daily average value of the portfolio and are calculated over a period of usually a financial year.
Quick facts on funds of funds, wrap funds, multi-manager funds and linked products
Many investors invest in more than one fund in order to diversify away the risk of selecting the wrong fund manager or management style.
Understanding funds of funds, wrap funds, multi-manager funds and linked products
The rapid growth of the South African collective investment industry is a clear signal that collective investment portfolios are the favoured investment vehicle for the man on the street.
Multiple Classes of Units
South African investors now have a range of more than 400 locally registered collective investment portfolios to invest in, not to mention the ever-increasing number of offshore funds that are registered for local distribution.
You, collective investment portfolios and Capital Gains Tax
In conclusion, CGT policy is in line with the objective of a collective investment portfolio as a medium- to long- term savings and investment vehicle and should encourage collective investment portfolio investors to treat them as such.
THE FACTS ON INVESTING IN FOREIGN COLLECTIVE INVESTMENT SCHEMES
Over the past few years, investors have been strongly encouraged to invest abroad as a means of diversifying risk and hedging against the depreciation of the rand and domestic inflation.
It is important to note that Collective Investment Schemes in Securities (CIS) are generally medium to long term investments. The value of participatory interests may go down as well as up and past performance is not necessarily a guide to the future. CIS are traded at ruling prices and can engage in borrowing and scrip lending. A schedule of fees and charges and maximum commissions is available on request from the company/scheme. Commission and incentives may be paid and if so, would be included in the overall costs. Some portfolios forward price while other portfolios price historically. Consult the company/scheme for details. Fluctuations or movements in exchange rates may cause the value of underlying international investments to go up or down.
