Page 26 - Profile's Unit Trusts & Collective Investments - September 2025

Chapter 1 History of collective investment schemes

Chapter 1

History of collective NQF

investment schemes Relevant to
2413129: 1, 3, 4
243135: 3
243148: 1
When the first South African unit trust was launched by Sage in 1965, 243153: 2, 3
it was marketed as an investment vehicle for the man in the street.
Unit trusts were designed to give ordinary people access to the JSE, until then
seen as the preserve of the very rich and those with specialist knowledge. For the
average working person, the JSE was a dangerous and mysterious place, a place
of high finance where fortunes were made and lost. Unit trusts offered professional
management, low initial investment amounts, diversification, and access to
expensive blue chip shares. Today, collective investments themselves require
specialist knowledge, as unit holders must make choices between general funds,
theme funds, funds of funds, hedge funds, bond funds, multi-manager funds,
passive funds, and many more.

The establishment of unit trusts
The first formal collective investment schemes in South Africa (SA), as elsewhere in the world,
were equity unit trusts.
The share market, even today, is seen by many non-financial people as an arcane and mysterious
club, and this was even more true in the middle of the last century.
Many people regarded the stock market as a very risky investment environment, where fortunes
could be made or lost very quickly. While stockbroking firms offered individual portfolio management
services, they often required a minimum lump sum investment amount far in excess of what the
average working person could afford. Managing one’s own account required an understanding of
financial terminology, and most importantly, an understanding of what makes share prices rise and
fall, a question that still befuddles many non-financial people.
For all of these reasons, participation of ordinary working people in the share market
was uncommon.
At the same time, there was certainly a public perception that, given the correct circumstances,
knowledge and management, the share market was a place where wealth could be accumulated.
In this mix of trepidation and aspiration, Sage (the first South African company to establish unit
trusts), saw a business opportunity.
The first unit trust was launched on 14 June 1965 by Sage in the middle of an eight-year stock
market bull run that started in 1961. Together with his colleagues, Sage founder Louis Shill
worked closely with the financial authorities to create the legislative platform which would allow
the establishment of a unit trust industry. Original shareholders in the first Sage fund were Shill,

Stocks and shares
What’s the difference between stocks and shares?
The term share generally refers to a single unit (as in one ordinary share), whereas stock
refers to a group of shares (as in, “my stock in ABC Ltd. has risen handsomely”). In practice
the terms are used interchangeably.
Stock market and share market refer to the same place. In the context of share investments, a company’s
“stock” means the total number of shares issued by the company.

24 Profile’s Unit Trusts & Collective Investments September 2025