AVA WEALTH
Consultancy
What is Unit Trust?
A unit trust (also known as mutual fund) is a pool of money managed collectively by professional fund managers. It offers individual investors like you and me the opportunity to pool our money in a fund, which a professional fund manager then uses to invest, with the aim of achieving the best returns. Unit trusts are run by investment firms, and have specific investment themes.
You are entrusting the job of investing to the fund managers, and it's their full-time job to try their best to grow your money. Through buying units into the trust, your money will be pooled with that of other investors and invested according to the unit trust’s objectives.
We offer you a wide range of Unit Trust funds that invest in various asset classes:
Should you invest in Unit Trust?
One of the biggest benefits of investing in unit trusts is that it does not require a large amount of money, time or expertise.
Unit trust offers low initial investment of RM1,000 *varies with different funds*, but some finance institutions allow you to start as low as RM100 a month. This makes it a good way for new investors, especially young Malaysians, to start investing.
Also, because your money is being invested by a professional fund manager hired by the financial institution, you do not need to constantly monitor the markets and do extensive research about individual companies.
Another benefit of unit trust is liquidity. You can easily buy more units or sell part or all of your investment anytime, without being locked.
Furthermore, unit trusts in Malaysia are regulated by the Securities Commission Malaysia (Suruhanjaya Sekuriti Malaysia), so you can be assured that there is at least one level of safety net and protection from fraud.
How to start investing in Unit Trust?
1. Lump-sum Investment:
Make a one-time investment on a fund and take immediate advantage of the underlying market.
2. Regular Saving Plan (RSP) Investment:
Make regular investments (known as dollar-cost averaging) monthly.
3. EPF Members Investment Scheme:
A plan that allows you to withdraw your EPF savings to invest in EPF-approved Unit Trust funds. There are limits to how much money you are allowed to invest, depending on your age.
Before You Invest…
Before investing, ensure that you have carefully read the fund factsheet and understand what exactly you are buying into.
It is important to remember that unit trusts are not a ‘get rich quick’ scheme. No one can predict for sure what will happen in the global markets, and even professional fund managers may make mistakes. Always keep in mind that past performance is no guarantee of future returns.
It needs time to mature and by investing in unit trust. However, it is still one of the best ways to invest if you have minimal time and knowledge of investment.
Since the latest products available are more and more complicated, please contact us for a free explanation!