Why Unit Trust?

What is a Unit Trust?

Unit trusts is a collective investment scheme that pools the savings of a large number of investors. The money collected is invested by the fund manager in different types of stocks, bonds, or other securities in various proportions depending upon the objective of the fund.

Most of the unit trust funds in Malaysia are open-ended funds (the fund sells as many units as you and other investors want to buy and buys as many units you want to sell). This makes unit trust funds very liquid investments – though the price at which you sell may be less than your purchase price if the value of the fund has dropped.

You can make an initial investment with as little as RM1,000 and buy additional units when you have more money or invest a fixed amount on a regular monthly schedule via a bank account. Thus unit trust is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed portfolio.

Source: Signal Invest

Why invest in Unit Trust?

1. Professional Investment Management - The fund managers who take care of your unit trust funds 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.
2. Diversification - Unit trusts allow you to broaden your portfolio. With your nest-egg spread across a basket of securities, your overall investment risks are reduced.
3. Liquidity - An investor can sell his units, wholly or partially, at the following trading day's unit buying price. Units have a high liquidity, that is, they can be readily converted into cash.
4. Ease of Transactions - Unit trusts provide investors with a simpler, more convenient and less time-consuming method of investing in securities. The paperwork that comes with managing your own portfolio of shares and bonds are handled by the fund manager.
5. Security - The interests of unitholders are protected by the appointment of an independent trustee to hold the fund's assets on behalf of the unitholders. The trustee will also ensure that the fund manager will always manage the fund in accordance to the Deed of the fund and the Guidelines issued by the Securities Commission. 
6. Affordable and Flexible - The minimum initial investment amount is low as compared to investment in shares and/ or bonds. Furthermore, additional investment can be made in even smaller amounts than the minimum investment amount.

Source: MAAKL Mutual