Page 198 - Profile's Unit Trusts & Collective Investments - September 2025

Fact sheet tips

The repurchase price was therefore higher for an institution paying only 0.25% per annum compared
to a private investor paying 1.50% per annum. Under the new CIS Act, annual fees are now a direct
charge against the portfolio and do not necessarily have to be recovered only from portfolio income.
Certain other costs incurred by a management company (such as dealing costs) can now be
charged directly against the portfolio, which means the new NAV will be marginally lower than the
old repurchase price. As annual fees sometimes differ for different classes of units within the same
fund, the NAV price may differ across classes.
The Association for Savings and Invesment South Africa (ASISA), formerly known as the
Association of Collective Investments (ACI), decided not to require management companies to
calculate historical data for funds (ie, to create a history of NAV prices). Buy prices remain a valid
proxy for entry costs into unit trusts prior to 2003 – however, performance figures calculated by
ProfileData with a start date before 2003 use the historic sell price as a proxy for NAV in order to
match NAV-to-NAV performance as closely as possible.
Conventions for the Unit Trusts Handbook
For performance periods starting after 1 April 2000, we use A class prices and dividends to
calculate investment returns. For performance periods starting before 1 April 2000, we use R class
prices. This is because only R class prices were available prior to April 2000. Conversely, investors
entering a fund after April 2000 were only able to buy A class units.
Charges
Most management companies apply the same scale of initial charges to funds within the same
sector (eg, all equity funds). For this reason, we show the table of charges on the CIS manager page.
The initial charges found on each CIS manager page specifies those funds that it applies to
(typically by category).
VAT
All charges and service fees are shown as VAT inclusive in this handbook.

Initial charges
This shows the initial charges levied by the management company. In the past initial charges were
designed to cover marketing and administration costs, but this “ring-fencing” of costs is no longer
applied in the industry. Many fund managers no longer charge initial fees. Expenses such as dealing
costs and marketable securities tax (MST) are charged directly to the portfolio. Broker commission,
which is usually subject to negotiation, is shown separately.
Most management companies, in fact, apply a sliding scale to the initial charge: the greater the
amount invested, the lower the initial charge. Initial charges on a large lump sum investment might
be as low as 1% or maybe even lower.
Fund switching charges
Many investors are attracted to the idea of being able to exploit the cyclical nature of the market by
switching from, say, an industrial fund to a mining fund when they feel bullish about gold and bearish
about industrials. Many management companies offer reduced initial charges if unitholders wish to
switch from one fund to another within the same management company.
Switching from an income fund to an equity fund usually attracts an initial charge, although this
may be reduced to a lower amount. Many management companies take the view that the initial
charge should only be recovered once on all funds invested. They therefore subtract the income
fund initial charge (usually 1%) from the equity fund initial charge in the event of a switch (eg, the
investor would pay 4%).
This is obviously not a universal practice: see the switching charges table under each CIS manager
for more information.
Switches from equity funds to income funds are often free of charge, or a nominal fee may
be levied.

196 Profile’s Unit Trusts & Collective Investments September 2025