Throughout my journey as a Financial Consultant, I was asked few questions particularly on the topic of investing in Unit Trusts. I decided to put a list on questions I received and the answers I given.
Note: The followings answers are applicable to Malaysia’s Unit Trust Investment industry
Q1. How do I start investing in Unit Trust?
A1. Briefly, these are the steps to start investing in Unit Trust.
Q2. What is/are the difference(s) between DIRECT AGENTS and SINGLE LICENSE INVESTMENT agents?
A2. Both AGENTS are registered with FIMM to introduce and distribute Unit Trust investment products to potential investors.
Q3. What are some ways to compare Unit Trusts and what is the importance of doing so?
A3. I answered this on Quora (as of 4 August 2017, the answer has been viewed 125 times).
First, understand what are unit trust and unit trust funds. Know the objectives of each components in a unit trust investment.
Know your financial objectives and assess your risk appetites. Know the basics and learn up the materials about unit trust investing. Unit trust funds will incur some charges when you invest – initial sales charge, annual and/or exit fees.
There are plenty of websites that can help you with the basics of unit trust investing i.e. Investopedia, iMoney, individual Fund Houses’ websites that promote Unit Trust Investments
Before you invest you should read the Prospectuses/Product Highlight Sheets/Fund Fact Sheets to understand each unit trust fund objectives and features. Unit trust funds are classified into different asset classes i.e. equities, bonds, money market
How can we monitor and compare unit trust funds?
There are plenty of monitoring tools that you can use to monitor your unit trust funds performance i.e. Lipper Web, Morningstar, Fundsupermart, eUnitTrust or via the monitoring system and/or statements given by the Fund House that you use to select and invest in the unit trust funds.
Why we should monitor our unit trust fund investments?
To make sure we can set a strategy for our next move to take if lets say the fund that we invest in, gains or loses above or below our desired returns benchmark – to switch, to add more or do nothing
Please do understand that there are some strategies you can use when investing in unit trust funds. One of the common strategy that unit trust investors use is to set the time horizon for the investment from medium to long term.
Tip: Don’t just look at short-term gains or losses of a unit trust fund. Fund Managers that manage the unit trust investments for us is also an important factor when considering a unit trust fund.