Make it easy to choose

2012-09-22 12:53

Unit trust classification simplified by Asisa, writes Maya Fisher-French

This week the Association for Savings & Investment SA (Asisa) announced changes to the way unit trusts would be classified by streamlining certain categories and renaming others.

The new classification should make it easier for investors to simplify their unit trust selection and comes into effect on January 1 2013.

Over the years there has been controversy around some of the subcategories, such as Value and Growth categories under Equity as well as the Targeted Absolute and Real Return category under Asset Allocation.

It was debatable as to when a fund had a value or growth bias or what exactly a “real return fund” was attempting to achieve that was different from other asset allocations.

Some name changes, like Fixed Income to Interest Bearing and Asset Allocation changing to Multi Asset just make more sense.

The reclassification has also brought in changes in line with international definitions, such as “short-term modified duration up to two” to replace Income Funds.

The new categories will be based on the fund’s investable universe.

In other words, what assets it is allowed to invest in.

It will no longer define investment style, so whether a fund manager invests for growth or value, if their investable universe is all the shares on the JSE, then they fall under Equity: General. 


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