supersunbird
Honorary Master
So what about an INDEX unit trust? Think about it for a minute...
Guess what? It tries to track an index just like an ETF. No ETF will outperform it's index either, neither will a INDEX unit Trust. The SA index fund grand daddy, Satrix, has ETFs and index Unit Trusts, since 2013, so not a new thing either (https://www.satrix.co.za/products).
You also get MANAGED unit trusts, like your Allan Grays and Coronations. They will try to beat whatever benchmark they chose to set for themselves when the fund was opened. Less than 20% of the Unit Trust managers can manage to beat the main index in their field over the long term.
Sidenote: In the USA, Unit Trusts go by the name Mutual Funds and Vanguard, the index fund 1000kg gorilla of the world, offers both ETFs and index Mutual Funds (https://investor.vanguard.com/investing/investment-products).
In the old days, when only life insurers sold RAs that were fixed contracts with low performance and heavy costs, it was bad, they stories one sometimes hears still pisses me off greatly. The Life Insurers and their parasite "advisors" make great coin off other peoples hard work.
There are many benefits to RAs, especially tax benefits, but there are also limitations that are put on one, in exchange for these benefits. But it is really hard to beat the tax benefits, even with a TFSA of the same amount.
Since the mid 2000s Unit Trust RAs came into being, and one can have RAs just invested in index Unit Trusts, with very low fees, just like your ETFs, RA fees of just 0.40% (like offered by Sygnia), just like many ETFs fees are.
