The Financial Sector Conduct Authority (FSCA) oversees mutual funds, which are often referred to as unit trusts in South Africa. They give investors access to financial markets in a simple and affordable manner while offering liquidity, competent management, and diversity.
What is a Mutual Fund? (Full Meaning Explained)
A mutual fund is a type of investment vehicle that pools money from multiple investors to purchase a diversified portfolio of assets, such as:
✔ Stocks (Equities) – Shares of publicly traded companies.
✔ Bonds (Fixed Income Securities) – Loans to governments or corporations.
✔ Money Market Instruments – Short-term, low-risk investments.
✔ Property and Real Estate Assets – Investments in commercial and residential properties.
These funds are professionally managed by fund managers who make investment decisions on behalf of investors. The goal is to provide returns through capital appreciation (growth) or income generation (dividends/interest payments).
In South Africa, mutual funds are called unit trusts, and they are regulated by the Financial Sector Conduct Authority (FSCA) to ensure transparency and investor protection.
How Do Mutual Funds (Unit Trusts) Work in South Africa?
When you invest in a mutual fund, you buy units in the fund, which represent a portion of the total assets. The value of these units fluctuates based