New unit trusts on the block

Four new unit trust funds have been launched for longer-term investors with investment horizons of five or more years.

10X Prime High Equity Fund
Simple, low-cost investment solution

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 around 2.5% p.a. (excluding VAT), according to research from Morningstar. In comparison, the 10X unit trust fee is 0.5% pa (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% pa (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
Access to hedge funds for retail investors

Novare recently 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 (CIS), 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 apply leverage.

Minimum lump sum investment: R50 000
Minimum monthly investment: R1 000

Colourfield BCI Smart Equity Fund
Beating the index at a lower cost

Smart beta investing seems to be the latest trend this year in the investment universe and Colourfield Liability Solutions launched a unit trust fund in April that not only uses the smart beta investing approach, but uses the Swix (JSE/FTSE shareholder weighted index) as its benchmark. Costa Economou, chief executive of Colourfield Liability Solutions explains that this is the first unit trust fund the company has launched and the fund 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, and has the primary objective of achieving 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 Fun
Maximizing investment opportunities

Launched earlier this year, this fund is suitable for investors with an appetite for capital and income growth, especially discretionary savers looking for sources of returns beyond balanced funds which have to stick to Regulation 28 which limits the fund to a maximum exposure to equities of 75% and offshore exposure to 25%. The 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

This article first appeared in City Press