Jump into the world of unit trusts
Unit trusts are popular because they're managed by experts and they offer diversification. Learn a bit more about how they can grow your wealth.
What are unit trusts?
A unit trust is a form of investment fund. A pool of money collected from investors worldwide is managed by a fund manager, who will use it to invest in different assets for steady and long-term growth. Each unit trust has a specific focus. This can be a geographical location or a business sector. Fund managers will then pick suitable assets and regularly review the performance.
Depending on the unit trust's objective, some managers will pick riskier assets for better return potential, while others may opt for something safer. Since you're investing in multiple assets at once as small fractions, you won't feel as much impact if one of the investments does poorly, compared to investing in just one asset.
Unit trusts have several advantages, including:
- Professional management by experts who are dedicated to the pool's growth
- Access to global opportunities otherwise unavailable for individual investors
- Risk diversification as the fund comprises multiple assets
But there are a few considerations:
- Funds have annual management fees
- They're medium- to long-term investments, and might not be suitable for short-term investors
- Like all other investments, there will be risks involved when you invest in unit trusts
Understand more about Unit Trust
What types of unit trusts can you find?
Here are a few of the most common types of unit trust funds:
This type involves investing in company stocks. Fund managers will seek out companies from different locations and sectors, such as technology, property and finance.
This type invests in a portfolio of bonds from a specific geographical location or sector. It generally has lower risks, provides income to investors but gives lower potential returns compared to equity funds.
Balanced or multi-asset funds
A combination of different asset types, such as equities, bonds and cash, this is good if you are looking for extra diversification in your portfolio.
The income funds focus on providing regular income or dividends to investors and such approach can be found in equity, bond, balanced or multi-asset funds. If you're looking for a regular source of extra income, income funds are the way to go.
Money market funds
This type involves investing in cash equivalent instruments, such as treasury bills or bank promissory notes.
There are many other kinds of funds available, such as property funds, technology funds and single-country /region funds.
Now, where to find them?
When choosing your unit trust, remember to complete our risk profile questionnaire to understand your risk appetite. Then, look for a suitable unit trust based on your risk level.
Want to get started? Go to Fund Express to find suitable unit trusts. With Fund Express, you can sort unit trusts by category and fund house. To have a better idea on each fund, view the graphs and data indicating their performances in the past years.
Want to go straight to the trailblazers? Select the 'Top Performers' tabs to find the information you need. You can even view and compare funds across multiple sectors. If you see a sector you fancy, simply select it and choose from the list provided, or even compare individual unit trusts' performance so you can make an informed decision.
You can view the following information on an individual unit trust:
- Performance over the years
- Yearly returns and key fund statistics
- Charts showing the fund allocation by location and sector
- Dividend information
- Fund size and quality rating
- Brochures and fund documents
As you make the move to invest, you can either pay a lump sum, or opt for a monthly payment through our monthly investment plans.
Contact us if you still have questions. Our wealth managers are happy to help.