Tag Archives: Unit Trust

Student Policy or Voluntary Investment /Unit Trusts?

When saving for your children studies, do you go the Student Policy route or the Voluntary Investment (Unit Trusts) route?

A Voluntary Investment offers you more flexibility and the costs involved are a lot lower and more transparent. This investment also allows more liquidity than a Student Policy.

Student policies are an Endowment Policy with fixed terms, fixed cost structure and a fixed contribution pattern. If there is any change in the contribution of the investment or you want the suspend your contributions for a while, a penalty fee will be applicable. This will be subtracted from the current fund value.

The benefit of this policy, lies in the fact that you can add risk cover to it. For example, if the premium payer becomes disable or passes away the life insurance company will pay the rest of the premiums until the policy come to term. This means a portion of the premium will be used for the risk cover and the remainder will be invested. Continue reading

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Mutual Fund/Unit Trust vs Direct Equity Investment?

When looking at these investment options, there no real right or wrong answer. Each option has pros and cons, you’ll have to decide which options will suit you best.

With a Direct Equity Investment you’ll need a lot of time, knowledge, discipline, capital and the ability to detach yourself emotionally from your investment. If you have all these arrows in your quiver and you can time the market, the returns will definitely be superior compared to a Mutual Fund Manager.

When looking at Units Trust, here you’ll get the time, knowledge and discipline of a fund manager. Who should be an expert in this area. Unit Trust also gives you more exposure to a broad range of stocks for not a lot of money. You can build a portfolio with adding ad hoc payments or a monthly debit order over time, without having to pay brokerage fee on every transaction. Continue reading

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