What Is Unit Trust?

So what is unit trust by the way?

"Unit Trust 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.

The income earned through these investments and the capital appreciation realized by the scheme, after deducting the trading costs and expenses of managing and administering the fund are paid out to the unit holders in proportion to the number of units owned by them.

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.

Each Fund has a defined investment objective and strategy." - Signalinvest.com

Sounds very technical huh? Or feel this is not for you? 

Saya highlight kan beberapa main key point, which is very significant on how to understand unit trust better.

1) collective investment scheme - satu skim secara berkumpulan, melibatkan begitu ramai pelabur melabur untuk mendapatkan keuntungan. Kenapa ramai? Kerana lebih ramai pelabur, skim tersebut lebih berupaya untuk melabur dalam lebih banyak industri/top holdings (diversified the assets, thus minimal risks). Then fahamlah kita eventhough we have RM1,000 in cash, we already can invest in equity, which is very expensive if you want to do that by yourself (yes, very expensive and we are talking about few hundred thousands and above).

Then the funds generate profit, where thus the profit go? 

YOU!

2) The profit - paid out to the unit holders in proportion to the number of units owned by them. Bila kita melabur, kita sebenarnya membeli unit yang ada dalam sesuatu skim/funds tersebut pada harga semasa hari tersebut. Keuntungan darinya (iaitu 1- Price appreciation 2-dividen) diagihkan kepada tuan punya unit mengikut jumlah unit yang dipegangnya. Dividen pula diberi untuk membeli tambahan unit, jadi akan terdapat capital gain di situ. Bayangkan jika setiap tahun fund manager mengumumkan 7% dividen, 1000 unit (assume) yg asalnya dipunyai oleh kita, akan menjadi 1070 unit untuk didagangkan semula pada tahun berikutnya. Bayangkan jika pelaburan ini berterusan selama 5 atau lebih tahun?


3) Bagaimana untuk mengeluarkan semula wang pelaburan kita? Unit trust investment is a very liquid investments.  We can anytime redeems our units (basic and dividens) at anytime at current price. So tiada issue jika kita rasa susah untuk mengeluarkan kembali duit kita.


Jelas? Any questions?