In 2024, we began the process of launching a range of 2IP-managed Unit Trusts.

This was a deliberate decision, shaped by how the investment industry is evolving and how we can best deliver our expertise to serve clients and advisors.

Our goal is to make investing simpler, more transparent, and more effective for both you and your clients.

While model portfolios (wrap funds) on LISP platforms have been a cornerstone for years, Unit Trusts offer several clear advantages that can enhance how you deliver value as an advisor.

1. 1. Greater Transparency

• Fully Audited: Each Unit Trust is audited at the fund level.
• Daily Pricing: Investors get accurate, up-to-date valuations.
• Clearer Performance Reporting: Fund returns and Total Investment Charges (TICs) are published regularly.
• Fee Management: Fees can be structured and communicated more effectively.

Result: You and your clients know exactly how investments are performing and what they’re paying.

2. Superior Execution Efficiency

• Faster Implementation: Investment views can be implemented daily, with immediate effect—versus delays of up to five business days (or more) in some model portfolio environments due to LISP trading rules.
• Greater Control: Our team can act quickly on conviction calls, improving responsiveness.

Result: Faster decisions, better alignment with your investment views.

3. Broader Investment Opportunities

• Broader Universe: Access to a wider range of funds and global investment options.
• Preferential Fee Classes: Preferential fee classes for select underlying funds.
• Direct Offshore Access: Investment into USD-denominated offshore funds reduces fees and avoids capacity limits of rand feeder funds.

Result: More choice and cost efficiency for your clients.

4. Tax Advantages

• No CGT Within the Fund: Portfolio switches, rebalancing, or internal transactions do not trigger capital gains tax.

5. Simplified Advisor Experience

• Less Administration: Reduced paperwork compared to model portfolios.
• Lower Compliance Friction: No additional mandates or documentation for DFM-managed wrap funds.
• Flexible Client Solutions:
  • Use Unit Trusts as core building blocks while adding satellite funds to meet individual client needs.
  • In contrast, adding or customizing funds within a model portfolio structure can be cumbersome and difficult to express under one client contract on LISP platforms.

6. Alignment with Industry Best Practice

The industry has been increasingly critical of model portfolios for their lack of transparency around performance and fees.

We are proud of our long-term track record across the mandates we manage (10+ years) and believe publishing our performance openly via Unit Trusts is the logical next step.

At 2IP, we want to make your investing experience simpler and more transparent.

Our Unit Trust range is a step towards combining the strengths of our long-term investment approach with a structure designed for today’s investor.

The Bottom Line

At 2IP, our Unit Trust range is designed to help you deliver better client outcomes:

• More transparency
• Faster execution
• Broader opportunities
• Tax and cost efficiency
• Less complexity

It’s a structure built for the realities of today’s market—helping you focus on what matters most: your clients.

 

 

Written by Marius Kilian