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UNIT TRUST PURCHASING GUIDE

STEP ONESTEP ONE

Determine your goal and amount that you are saving towards. (If you require assistance to

determine future values or what you need to invest to reach your goals move to the goal

calculation worksheet.).

Goal (e.g. overseas trip)

Period (years)

Value target at the end of the above period R

STEP TWO: LIFESTYLE ANALYSIS QUESTIONNAIRESTEP TWO: LIFESTYLE ANALYSIS QUESTIONNAIRE

1.1. When will you need the money that you are planning to invest for your goal?When will you need the money that you are planning to invest for your goal?

Within 2 to 3 years 5

4 to 6 years 35

7 to 10 years 40

More than 10 years 50

POINTSPOINTS

2.2. Assuming an inflation rate of 9% per year, how do you see your annual income growingAssuming an inflation rate of 9% per year, how do you see your annual income growingover the next five years?over the next five years?

Will far outpace inflation (new job etc.) 5Will stay ahead of inflation 3

Will keep pace with inflation 2

Will decrease / not keep pace 50

POINTSPOINTS

3.3. How much of your monthly take-home income is used to pay debts other than yourHow much of your monthly take-home income is used to pay debts other than your

home loan?home loan? (e.g. vehicle HP, credit cards)

Less than 10% 8

Between 10% and 25% 6Between 25% and 50% 3

More than 10% 1

POINTSPOINTS

4.4. How many dependants do you need to support?How many dependants do you need to support?

None 4

1 32 to 3 2

More than 3 1

POINTSPOINTS

Click here to open goal calculation worksheet
http://trusts2.pdf/

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5.5. Do youDo you have an emergency or reserve savings fund?have an emergency or reserve savings fund? (This should ideally equal at least two

to three months take-home income.)No provision 2

Yes, but less than one months income 6Yes, I have an adequate reserve 8

POINTSPOINTS

6.6. Apart from an emergency fund, do you have separate savings investment plans for futureApart from an emergency fund, do you have separate savings investment plans for future

financial needs such as university education, a deposit on a motor vehicle or a secondfinancial needs such as university education, a deposit on a motor vehicle or a second

home?home?

Yes, I have separate investment plans 8

I do not expect to have such expenses 6

I intend to withdraw a portion of this money for theseexpenses(answer question 7 accordingly)

5

No, I do not have separate investment plans at this time 2

POINTSPOINTS

7.7. Do you expect to withdraw more than one third of this money within 10 years?Do you expect to withdraw more than one third of this money within 10 years?No, I do not 50

Yes, probably within 3 years 5

Yes, probably in 4 to 6 years 30

Yes, probably in 7 to 10 years 50

POINTSPOINTS

8.8. Have you ever invested, or would you invest again, individual gilts or in gilt unit t rusts?Have you ever invested, or would you invest again, individual gilts or in gilt unit trusts?

(gilts: government or parastatal. stock; e.g. Eskom)

No, and I would be uncomfortable with the risk if I did 1

No, but I would be comfortable with the risk if I did 9

Yes, but I was uncomfortable with the risk 2

Yes, and I felt quite comfortable with the risk 10

POINTSPOINTS

9.9. Have you ever invested or would you invest again, in individual shares or equity unitHave you ever invested or would you invest again, in individual shares or equity unit

trusts?trusts?

No, and I would be uncomfortable with the risk if I did 1No, but I would be comfortable with the risk if I did 15

Yes, but I was uncomfortable with the risk 3

Yes, and I felt quite comfortable with the risk 16

POINTSPOINTS

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10.10. Which answer below best describes your attitudeWhich answer below best describes your attitude to investment risk?to investment risk?I would only select investments with a low degree of risk 2

I prefer a mix of investments with emphasis on those with a

lower degree of risk, and a small portion in others that have a

higher degree of risk but also a higher return potential

5

I prefer a balanced mix of investments - some that have a low

degree of risk, others that have higher risk but also higher

return potential

9

I prefer an aggressive mix of investments - emphasising thosethat have greater risk and thus higher return potential, along

with some lower risk investments

12

I would only select investments with a higher degree of risk

and thus greater potential for higher returns

16

POINTSPOINTS

11.11. If you were able to improve your return by taking more risk, how far would you go?If you were able to improve your return by taking more risk, how far would you go?

Be willing to take a lot more risk with all your money 16

Be will ing to take a lot more risk with some of your money 12

Be willing to take a little more risk with all your money 10

Be willing to take more risk with some of your money 5

Be unlikely to take much more risk 2

POINTSPOINTS

12.12. What percentage of your total investment portfolio does this investment represent?What percentage of your total investment portfolio does this investment represent?

(exclude emergency savings, pension fund contributions and residential investments)

Use the examples below to determine your own figure and then apply this to the scoring procedure below:

Lump sum contributionsLump sum contributionsAssuming you decide to invest R12 000 of your total investment portfolio of R20 000, your percentagewould be:

(R12 000 R20 000) x 100 = 60%

Monthly contributionsMonthly contributionsAssuming the value of your current investment portfolio is R20 000. In addition, you decide to investR350 per month. Multiply this monthly amount by the number of months you intend to invest for.

Assuming an investment over 36 months:

[(R350 x 36 months) R20 000 + (R350 x 36 months)] x 100 = 39%

Less than 25% 8Between 25% and 50% 7

Between 51% and 75% 3

More than 75% 2

POINTSPOINTS

TOTAL POINTS FROM ALL 12 QUESTIONSTOTAL POINTS FROM ALL 12 QUESTIONS

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STEP THREESTEP THREEMatch your total score to one of the following portfolios .

100%100%

40 %40 %

35 %35 %

25 %25 %

50 %50 %50 %50 %

70 %70 %

30 %30 %

100%100% 100%100%

STEP FOURSTEP FOUR

Select a basket of unit trusts which reflects the portfolio or asset mix suggested. Start by writing

down your asset mix:

PORTFOLIO/ASSET MIXPORTFOLIO/ASSET MIX PERCENTAGEPERCENTAGE RAND AMOUNTRAND AMOUNT

Equity based unit trusts % R

Cash based unit trusts % R

Gilt based unit trusts % R

Source: Standard Bank Fund Managers, 1997

Investing for less than 2 years If your points total 70 or below If your points total between 71 and 130

If your points total between 131 and 175 If your points total above 175

PRESERVATION PORTFOLIO CONSERVATIVE GROWTH PRTFLIO BALANCED GROWTH PORTFOLIO

HIGH GROWTH PORTFOLIO AGGRESSIVE GROWTH PORTFOLIO

Gilt unit trusts

Cash unit trusts

Equity unit trusts

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