Investec is planning to launch four new specialist unit trusts soon: the Investec Money Fund, Investec Value Fund, Investec Growth Fund and Investec Active Fund.
The Investec Money Fund will be one of the first money market funds to be launched after the official go-ahead. Money market funds will offer ordinary investors better rates on short-term money invested in the wholesale money market than they can obtain from bank accounts. The charges on money market unit trusts will be lower than for general equity funds.
André Joubert, portfolio manager at Investec Asset Management, says the go-ahead for money market funds in South Africa opens an investment avenue which has been enormously successful in the United States. Because of the low charges, however, money-market funds need to build up a certain critical mass before they become profitable, and for this reason the minimum lump sum investment into money market funds is expected to be fairly high at about R20 000. It is hoped that in time this will be lowered making money market funds accessible to more investors.
Other funds Investec is planning to launch are a value fund and a growth fund. The Investec Value Fund will invest in shares which are trading below net asset value or those which are trading below their historic average.
The Investec Growth Fund is not just a fancy name for an equity fund, as "growth funds" often are, Joubert says. "We believe this is the next logical progression after the Investec Emerging Companies Fund. Over time an 'emerging company' will become a 'growth company'. The type of companies the Growth Fund will invest in will probably have a market capitalisation of between R2,5 billion and R5 billion."
The Investec Active Fund is the fourth fund on the cards for this year. It will fall into the Managed Flexible category, which means it can invest relatively freely in equities, bonds and cash without being constrained by the Prudential Investment Guidelines for pension and provident funds.
The Active Fund will be more aggressive than most managed flexible funds. It will make use of derivatives more than most unit trusts do and will approach equities as an asset class rather than from a stock-selection perspective, investing in "baskets of shares", share packages designed to imitate exposure to an index.