“Collective investment schemes offer better returns than cash in the long run. With inflation invariably eroding your money in a bank savings account, where should you store your nest egg? Probably in collective investment schemes, an umbrella term that includes unit trusts and their younger stock exchange siblings, exchange-traded funds (ETFs), Reports Robert Laing from Business Times.

“Their key attraction is that they offer instant diversification on a low budget. Most come with savings plans, whereby you can gradually build up your hoard from R300 or so a month. Unlike endowment policies, they don’t lock you in for five years or more with hefty surrender penalties if you can’t stay the term,” Reports Laing.

“They are managed transparently, meaning their underlying assets are publicly reported, usually on a website these days. And they are regularly checked to see that they actually own what they claim to. Deciding on a collective investment scheme is easy. The difficult part comes when you look at the 1143 choices on the unit trust page,” Reports Laing.

The million dollar question is?  “Assuming you can only afford to sign up for one unit trust or ETF, which one should you pick?” Laing says.

Full Story:  Here

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