Unit Trusts are Collective Investment Schemes which serve not only to provide individuals and institutions with exposure to the financial markets but to provide a diversified exposure to the investment universe of each applicable fund.
This means that investors are able to invest easily according to their risk appetite by simply choosing a fund manager they trust and a fund exposed to either the financial markets in general, a specific type of asset or a specific sector. Asset Allocation funds have even taken the responsibility of choosing which market or sector to be exposed to, and at what time, out of the hands of the investor and placed this responsibility with the fund manager. Thus Unit Trusts can allow for very effective buy and hold strategies at varying levels of risk appetite.
Investors who choose a fund manager and a fund that matches their risk appetite still face a problem – fund manager risk. This is the risk that the chosen fund manager is not able to perform according to the mandate of the fund, either on a performance or a risk measure. The only way to manage this risk is by not placing all one’s eggs in one basket ,i.e. not investing with only one fund manager, and through regular contact and ongoing monitoring of the various fund managers. A problem that investors face is that contact with the fund managers is limited for most investors to the marketing material of the fund managers and road shows which are usually only open to those already invested in the various funds.
This is where we believe that true value is added to the investor when employing a competent and well informed financial advisor. Those financial advisors who choose to do so can have an incredibly close ongoing relationship with the various fund managers and as such are able to make better informed decisions with regard to the choice and combination of the fund managers.
Due to the close relationships Ternary Financial Services has with the fund managers we are able to construct portfolios which not only match the specific risk appetite needs of each client but which have proven to provide our clients with returns in excess of inflation over time. By combining the appropriate funds and fund managers we are able to minimise the risk of capital loss while maximising potential returns.
