A collective investment portfolio is a collective investment that enables you to pool your money with other investors who have similar investment objectives.
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.
Many investors invest in more than one fund in order to diversify away the risk of selecting the wrong fund manager or management style.
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.
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.
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.