What is Unit
Trust?
A
unit trust fund is a pooled monies investment scheme from the investors that
have similar investment objectives in a special "trust" fund managed
by professional fund managers whereby the pooled monies will then be invested
in a diversified portfolios (reducing the risk) of securities and other assets
in accordance with the unit trust fund's investment objectives and as permitted
under the Securities Commission's (SC) Guidelines on Unit Trust Funds.
This
can be illustrated as a tripartite relationship amongst the manager, the
trustee and the unit holders. The obligations and rights of each of the
three parties are specified in the Deed, (a legal document entered into between
the manager and the trustee, and registered with the SC). The Deed regulates
the duties and responsibilities of the manager and the trustee with regard to
the operations of the trust fund and protects the unit holders' interests.
The manager shall
1. Reports to trustee
regarding UTS investments
2. Promotes and
distributes UTS
3. Services the unit
holder
4. Distributes income,
calculates the unit price
5. Provides repurchase
facilities
6. Maintain registration of unit holder
The trustee shall
1. Safeguards UTS assets
2. Ensure funds are
invested in accordance with deeds and objectives
3. Supervise the operation
4. Approves and monitors
all financial transactions
5. Collects all incomes
The unit holder shall
1. Invest and responsible
for fees that earned by UTMC and trustee
2. Reap the rewards of the
fund
Why Invest in
Unit Trust?
Investing in Unit Trust is one way of wealth
accumulation. It works similar to investing directly to the stock market
but with considerable and calculated risk.
The risk become minimize because oh these
factors:
1. Professional
Investment Management
The money from the trust fund will be managed by fund
managers who analyze information and statistic from leading economist, market
analyst and therefore have a better position and understanding to invest, grow
and increase the value of portfolios, better than individual investors invest
in the stock market.
2. Diversification
Fund managers usually sets the allocation of the fund
to be invested in. Like for example, for the high level of return (which
always come with high risk), the fund managers will maintain at least 80% of
the fund size to the equity and the remaining will be invested in Sukuk and Syariah
Based liquid asset. And within that 80% of Equity Exposure, the fund
managers always invest to at least 3 companies that could give high
return. Therefore, the risk is minimized by spreading the investment to
various counters.
Other than the above
people invest in Unit Trust because:
i. Start
with low investment
an investor can invest as low as RM 1000 to own a
portfolio. This amount of money is too low to start to invest personally
in the stock market.
ii. Easy to liquid
Investor can repurchase his units at the following trading day's unit buying
price and subsequently the units can be readily converted into cash within 10
working days.
iii. Security
Investors are protected by the appointment of
independent trustee that hold the funds' asset on behalf of the unit holders.
The trustee will ensure the fund managers manage the fund in accord to the Deed
of the fund and the Guideline
Why Unit Trust have Becoming Popular in
Malaysia?
With the
proliferation of various types of investment products in recent years, people
often look for a straight forward, professionally managed investment
opportunity that caters for basic investment needs. Public Mutual has succeeded
in meeting those needs with its unit trust funds.
Children's
Education
Unit
trust can help you to cover the spiraling cost of education for your children
or grandchildren. The sooner you start your plan, the lesser will be the
burden. Time can be your greatest ally. Go to Education Planning for
more details.
Home
Ownership
Unit
trust can help you to pay off your mortgage earlier, purchase a bigger house or
upgrade your existing house. As with any plan, start early. Many bricks build a
castle. Go to Home Ownership Planning for more details.
Retirement
Growing
old and retiring is inevitable. It is never too early to plan for retirement
even though you have the comfort of the Employees' Provident Fund (EPF). You
have the right and choice to retire in dignity. Retire comfortably. Plan a nest
for your retirement home, orchard and the likes. Unit trust can help do the job.
Go to Retirement Planning for more details.
Cash
Reserves
The
only certainty in life is the uncertainty or unexpected emergencies. Unit trust
can help you to set aside some cash for rainy days.
Regardless
of your own needs and wants, unit trust makes sense, for potential return and
security.
