A Unit Trust is a mediator that brings together a group of people and invests their money in stocks, bonds and other securities. Each Investor owns shares, which represents a portion of the holding of the fund. Thus, a Unit Trust is one of the most viable investment options for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.
Unit Trusts offer a way for individuals to pool their money together and use a professional money manager (Laurence Paul Investment Services Limited) for access to investments such as Treasury Bills, Government bonds, Shares and other income generation securities.
There is little doubt that every South African who is working and paying tax should take advantage of the South African Treasury Tax Free savings incentive.
The unit trust industry is like a candy store with something for everyone no matter what stage of life you find yourself. If you are a young woman in your twenties, newly graduated and looking to shore up your retirement planning, or a 60 year old man who is looking at retiring, there is a unit trust with a risk profile ideal for you.
The beauty about the tax free incentive is that the total growth on your unit trusts is not taxed. Yes, read that again… The growth on your tax free investment is not taxed.
OK, so you want to take out a tax free unit trust investment that is going to offer you the maximum potential growth, right. Well not exactly, with potential high returns comes potential risk and the stage of life you are at will determine what level of risk you should be taking according to the time frame for your investment and of course your personal feelings on risk.
Another thing to consider is whether or not the tax free unit trust you invest in allows you to nominate benificiaries. This is an extremely important factor, in that the proceeds will go into your estate if there are no beneficiaries nominated. This results in beneficiaries having to wait sometimes very long periods of time before proceeds are paid out to them and of course the executor normally charges a fee based on the value of the estate.
South African Unit Trusts
There are a wide variety of unit trusts from a large number of Investment companies in South Africa. Our preferred South African investment companies are shown below.
Off-shore Unit Trusts
Investing in off-shore unit trusts as part of your tax free unit trust strategy offers the potential to hedge the rand and well as enjoying tax free growth. This is potentially a double whammy when it comes to investing.
Our preferred off-shore funds are managed by some of the Worlds most respected fund managem,ent companies.
In short, tax free unit trusts should be selected and evaluated according to a number of possible variables. Consult with one of our tax free investment consultants entirely free of charge to get the advice you need to make the right decisions.
