MAYSURE FINANCIAL SERVICES CC
Insurance in Johannesburg

The following prices were obtained from the various unit trust companies. A unit trust is a collective investment that enables you to pool your money with other investors who have similar investment objectives. Experienced investment managers invest this pool of money in different assets in financial markets. The unit price (also known as the net asset value (NAV)) is dependent on the market value of the instruments in which the pool of money is invested and therefore rises and falls. Unit trusts invest in a range of underlying assets. Unit trusts are managed by highly qualified investment managers, whose full-time job it is to make investment decisions. Your money is held separately from the managing company’s assets in a trust. The latter smoothes your investment into the market over time (called rand cost averaging) rather than being affected by a market movement at a particular time. Unit trust investors only incur CGT when they sell their units in a unit trust. Funds are classified as domestic, worldwide, foreign or regional depending on where the fund is invested. Fund of funds allow investors to benefit from the investment talents of a range of investment managers. If you require both income and capital growth you would choose a bond or asset allocation fund. Unit trusts are exempt from paying CGT and unit trust investors will only incur CGT when they sell their units in a unit trust. They will sustain a CGT cost every time a transaction in the portfolio is realized, which could be many times over the lifetime of a product. Having CGT paid outside of the unit trust means that unit trust portfolio managers can focus on their core business of managing an investment portfolio according to a mandate, rather than being distracted by tax issues. Unit trust investors will know when CGT is incurred. All local and foreign unit trusts will be subject to CGT, except for money market funds, which have a fixed price and which generate income rather than capital gains or losses. Hence, the gain or loss becomes the difference between the market value of your units at date of sale, less the base cost. For unit trusts, the calculation is therefore done per fund. Once the gain or loss has been calculated for each individual asset sold, the gains and losses are added together to determine an overall gain. Furthermore, your individual unit trust management company should send you a statement following 1 October, clearly recording the base cost of your investment. Each time you buy units the management company will recalculate the weighted average base cost by multiplying the existing number of units by the existing base cost of the units The total cost, calculated at the buy price, of the new units bought is added to obtain a new monetary value. The above method of calculating the base cost of units has been adopted as an ACI standard and is the method of calculation that management companies are required to use when reporting capital gains to SARS in terms of legislation. Foreign unit trust funds will not issue tax statements and unit holders in these schemes are required to calculate the gains and losses themselves.