The Basic

A unit trust fund consists of pooled moneys belonging to different investors. These investors share similar investment objectives. The pooled moneys are then invested in a diversified portfolio of investments and managed by professional fund managers.

Unit trust funds can invest in a wide range of assets or investment classes, which may not be ordinarily available to an individual investor. These investment classes may include government bonds and corporate bonds. Investments in such instruments require a large outlay of funds, which are often beyond the reach of individuals. Collectively, however, those investments can become accessible. The type of investment portfolios in unit trust funds is depended on the fund's nature or type as well as its objective and investment strategy. For example, a bond fund provides an individual the opportunity to invest in the bond market to potentially gain a steady stream of income.

An investor in a unit trust fund is called a unit holder. An investor can buy and sell units through the management company's authorised agent, be they retail sales agents or institutional unit trust agents (e.g. banks).

A unit holder has easy access to the performance of the fund's investments. Unit prices are calculated daily and are published in major newspapers. A unit holder would also receive a detailed report of the fund's portfolio every six months.

To safeguard the investments, a trustee is appointed for the fund. The trustee shall take custody and control of the assets of the fund and ensure that the fund manager adheres to the requirements as set out in the deed.