Unit Trust

Introduction to Unit Trust

A unit trust fund pools your money together with that of other investors into one large fund, which is then divided into units.

The funds invested in unit trusts are managed by professional fund managers, and each fund has clear investment objectives.

This enables you to use unit trusts to spread your money over a broad range of investments such as equities and bonds. The diversity of funds available allows you to choose the level of risks with which you are comfortable.

Generally, you should consider unit trusts as medium to long-term investment (three years or more) and as part of an overall investment strategy.

Advantages & Benefits of Investing in Unit Trusts

Let’s take a look at 5 of the most common reasons for investing in unit trusts.

1. Reduce Your Risks

Unit trusts allow you to broaden your portfolio. With your nest-egg spread across a basket of securities, your overall investment risks are reduced.

2. Maximize Your Investment Opportunities

The fund managers who take care of your unit trusts have access to information and statistics from leading economists and analysts. Consequently, they are in a better position than individual investors to identify opportunities for your investment to grow.

3. Easy Access to Your Money

With unit trusts, it is easy to have your money at short notice. This is because unit trusts can be bought and sold on any dealing day (which normally means any working day).

4. Economies of Scale

A unit trust is a scheme which usually involves a large number of investors. Therefore, operating costs and commissions are spread over the whole group. This means that unit trusts are a very cost-effective form of investment.

5. Peace of Mind

Investors are protected because assets in unit trusts are held by independent trustees who operate separately from the fund managers. Furthermore, the unit trust industry in Malaysia is regulated and falls under the control of the Securities Commission (SC).