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Investing

ETFs and unit trusts

Both can hold a basket of shares or bonds. An ETF trades on an exchange. A unit trust is bought from the manager at a dealing price. Neither is a bank deposit.

Reviewed 29 October 2026 by the WiT Money editorial team. This is general information, not a recommendation from a named adviser.

Key points

  • You own a portfolio, not a guaranteed balance.
  • TER is not every cost. TIC can be wider. Brokerage is often extra.
  • CODI does not cover these funds.

An exchange traded fund is listed. You buy and sell it through a broker during market hours, at a price that moves, and you pay brokerage and sometimes a bid-offer spread. A unit trust, or collective investment scheme portfolio, is priced at its net asset value at the dealing point. You may pay an initial fee or a platform fee as well as the fund fee.

Index funds and many ETFs try to follow a market rather than pick winners. That does not make them safe. It makes the job easier to understand: you earn, or lose, something close to that market, minus fees.

Fees

The total expense ratio is the fund's annual cost ratio from the fact sheet. The total investment charge can include costs the TER leaves out. A platform fee is charged by the account, not by the fund. Add the ones that apply to you. The ETF fee calculator and the unit trust fee calculator illustrate a drag from percentages you type. They do not read a fact sheet for you.

JSE and regulation

Listed ETFs trade under the exchange's rules. Unit trusts are collective investment schemes overseen in the regulatory system the FSCA describes. Authorisation of a manager is not a promise that the fund will rise, and it is not authorisation of every product the same brand sells.

Questions readers ask

Which is better?

The one whose holdings, fee and access match the job. A cheaper fund that holds the wrong market is not a better fund.

Related

Sources

Page updated 29 October 2026. A source date is the day WiT Money checked that page, not a promise the institution has not changed it since.