Old Mutual Unit Trusts review 2023

Old Mutual is a well-known South African financial services company that provides a variety of investment products, including unit trusts. […]

Old Mutual Unit Trusts

Old Mutual is a well-known South African financial services company that provides a variety of investment products, including unit trusts. Unit trusts are a popular investment vehicle that enables investors to combine their funds and invest in a diverse array of assets such as equities, bonds, and money market instruments. In this review, we’ll look at Old Mutual’s unit trusts in detail, including their features, benefits, and drawbacks.

Features

Old Mutual provides a variety of unit trusts managed by qualified financial professionals. These unit trusts to invest in a wide range of asset classes, such as stocks, bonds, money market instruments, and real estate. Some of the fundamental characteristics of Old Mutual’s unit trusts are as follows:

Diversification: Unit trusts from Old Mutual provide investors with access to a diverse range of assets, which helps to diversify risk and potentially boost profits.

Professional management: The unit trusts are managed by skilled financial professionals who make investment decisions using a disciplined investment approach.

Old Mutual unit trusts provide investors with the freedom to choose from a variety of investment options, including equity funds, bond funds, balanced funds, and money market funds.

Old Mutual’s unit trusts have a low minimum investment amount of R500, making them accessible to a wide spectrum of investors.

The Old Mutual Top 40 Fund, one of Old Mutual’s equity funds, has a 10-year annualised return of 11.48% as of 28 February 2023, while the Old Mutual Money Market Fund had a 10-year annualised return of 6.45%.

As of 28 February 2023, the Old Mutual Balanced Fund, which invests in a combination of stocks and fixed-income assets, had a 10-year annualised return of 9.06%.

Old Mutual unit trust investing costs range from 1.10% to 2.27%, depending on the fund.

Over the years, Old Mutual’s unit trusts have received various accolades, including Best South African Asset Manager at the 2022 Morningstar Awards and Best Fund Range at the 2022 Raging Bull Awards.

Any South African residents over the age of 18 with a valid South African ID or passport are eligible to invest in Old Mutual unit trusts.

Benefits

The potential for long-term gains is one of the primary advantages of investing in Old Mutual unit trusts. The unit trusts are managed by skilled financial professionals who make investment decisions using a disciplined investment approach. In the long run, this technique may produce larger returns than other investing strategies.

The diversification provided by Old Mutual’s unit trusts is another advantage. Investors might potentially reduce risk and increase returns by investing in a diverse range of assets. This is due to the fact that the performance of multiple asset classes is not always connected, which implies that when one asset class underperforms, another may outperform.

Old Mutual’s unit trusts also allow investors to select from a variety of investment options based on their investment objectives and risk tolerance. A money market fund, for example, may be chosen by an investor seeking a low-risk investment alternative. An investor, on the other hand, may choose to invest in an equity fund if they are willing to take on more risk in exchange for potentially larger rewards.

Drawbacks

The investment fees are one of the disadvantages of investing in Old Mutual’s unit trusts. Fees for unit trusts can be rather costly when compared to other investment options, and these fees can cut into long-term gains. Nonetheless, it is crucial to remember that the rates are competitive when compared to other South African unit trust providers.

Another disadvantage of investing in Old Mutual unit trusts is the possibility of underperformance. While competent investing experts administer the unit trusts, there is no assurance that they will beat the market or other investment options. External factors such as market circumstances, economic considerations, and geopolitical events may also have an impact on the performance of unit trusts.

Conclusion

Old Mutual unit trusts are a solid investment option for South Africans wishing to diversify their portfolio. Investing in these unit trusts offers the opportunity for long-term gains, diversification, and flexibility. Nonetheless, investors should evaluate the investment costs and the possibility of underperformance before making any investment decisions. Overall, Old Mutual’s unit trusts are an excellent alternative for investors who are willing to accept some risk in exchange for potentially better long-term returns.