2.5 Active vs Passive Funds
Active fund management means that a professional asset manager/ fund manager makes tactical decisions to buy or sell certain assets in the fund, based on his/ her view of opportunities in the market, in order to try and achieve superior growth in the fund (better growth than the average growth in the market); or to […]
2.4 Classification Category Definitions
A. First tier classification: South African Portfolios These are collective investment portfolios that invest at least 60% of their assets in South African investment markets. These collective investment portfolios may invest a maximum of 30% of their assets outside of South Africa plus an additional 10% of their assets in Africa excluding South Africa. Note: […]
2.3 ASISA Fund Classification
The ASISA Standard on Fund Classification for South African Regulated Collective Investment Portfolios (“ASISA Fund Classification Standard”) establishes and maintains a classification system for CIS portfolios in South Africa. The objectives of the ASISA Fund Classification Standard are as follows: Promote investor awareness and understanding of CIS portfolio types. Assist with the comparison of CIS […]
2.2 Classification According to the Collective Investment Schemes Act
The CIS Act makes provision for five different types of CIS: CISs in securities: Schemes where the portfolio consists of shares, preference shares, bonds, futures, options, warrants and / or money market instruments. CISs in properties (CISPs): Schemes where the portfolio consists of property shares, immovable property and units in CISs in property in a […]
2.1 Introduction FCIS
CISs can be categorised as open-end funds or closed-end funds. Open-end funds publicly offer their shares or units to investors. Investors can buy and sell the shares or units at their approximate net asset value. The shares can be bought from or sold to the fund directly or via an intermediary such as a broker […]
1.3: Disadvantages of Investing in a Collective Investment Scheme
The disadvantages of investing in CISs are generally held to be as follows: Costs in respect of funds management and advice could be avoided if investors managed their own investments. This assumes investors have the expertise to so self-manage their investments. Although investors have a large variety of funds to choose from, they have no […]
1.2 Advantages of investing in a collective investment scheme
CISs make it possible for investors, including small savers, to obtain diversified investment portfolios with professional management at reasonable cost and to execute a widening range of investment strategies. In other words, the main benefits of CISs are: Diversification i.e., spreading the risk of investing over a range of investments Professional expertise to manage investors’ […]
1.1 Introduction FCIS
Collective investment schemes (CISs) is a generic term for any scheme where funds from various investors are pooled for investment purposes with each investor entitled to a proportional share of the net benefits of ownership of the underlying assets. A CIS consists of the following: Pooling of resources to gain sufficient size for portfolio diversification […]