Benefits of Unit Trust

The main advantages of investment into a Unit Trust fund is the reduction in investment risk by way of diversification as well as having approved professional investment managers manage the funds.

• Affordability & Diversification - As Unit trusts are a collective investment scheme, the investors can start with an investment amount as low as RM100. In addition, since the investors is investing into a diversified portfolio of investments, rather than an investment portfolio of one or two investments or shares, his risk is better spread out in line with the saying “do not put all your eggs in one basket”

• Liquidity - An excellent return on profit, inability to "cash out" or convert back into cash does not necessarily mean a good investment, as liquidity constitutes an additional risk factor for investors. Therefore, most investors prefer their investments to be liquid. That is, the investment can be easily converted back into cash. Unit trusts offer this feature because units can easily be bought or sold. Some funds can even return your investment to cash on the same day.

• Reduced costs - If an investor buys a large amount of direct investment, the amount they will be able to invest in each holding may be small. Transaction costs are usually based on the number and size of each transaction, so the total transaction costs will be drawn from a large block of capital (affecting future profits). Pooling of funds with other investors provides the advantage of a large purchase, making the transaction cost an insignificant part of the investment.

• Regulated industry - With the introduction of unit trust funds in Malaysia, the regulation comes from various regulatory bodies, in particular the Securities Commission. The entire range of variables related to the unit trust industry is governed by various legislation. The sole purpose of these regulations is to protect the interests of the investing public. Regulations provide investors with the level of comfort that they are investing in a safe investment mechanism.