What is Unit Trust and
is it the right
investment for me?

So you heard about Unit Trust and would like to find out if it's the right investment for you? Then you're at the right place. Here is what you need to know about unit trusts before you invest.

What are Unit Trusts?

Unit Trusts are a type of investment that is easily accessible and affordable for those who are just starting out on your investing journey. Unlike buying into a single company stock, a unit trust puts your money in the hands of a professional fund manager who will pool your money together with other investors.

The fund manager then uses this pool of funds to invest in various asset classes such as cash, bonds, shares, commodity and so many more on the stock market on your behalf. This fund is then split into smaller units that individual investors like you and me can buy.

One of the most popular unit trusts in Malaysia is Amanah Saham Bumiputera (ASB) that is distributed by Amanah Saham National Berhad (ASNB).

What does Unit Trust invest in?

The fund manager will use the pool of funds to invest in various investments within a specific group of financial assets, which will then be put together as a Unit Trust Fund. As of February 2023, the Security Commission of Malaysia reported a total of 758 launched unit trust funds in Malaysia! The unit trust fund can then be further categorised based on region, asset classes and/or industry such as:

By investing in a range of different asset classes, investment regions, and industry sectors, fund managers can help investors to diversify where their money is held to try and reduce risk to avoid putting all of your investment eggs into one basket.

You can also match your unit trust investments based on your risk appetite. Don't know how much risk you can tolerate? You can easily assess your risk appetite via a risk profile assessment on Maybank2u to determine the most suitable investments based on your risk profile.

As all investments carry an element of risk, make sure you have considered the different risk factors you are willing to undertake prior to making any type of investment.

How does Unit Trust make me money?

Like most “buy low, sell high” investment strategies, you make money by selling your units for a higher price than when you initially bought them. When you invest in unit trust, you do not actually own the assets in the unit trust fund that the fund manager has invested in. Instead, you buy units of the fund alongside many other investors. As the fund increases or decreases in value, the value of each unit increases or decreases accordingly.

As unit trusts aren't usually considered short term investments, a medium to long term unit trust investment (ie. 3 to 20 years) would give investors much better returns than cash savings and fixed deposits in the long run.

I'm pretty new to investing, should I still invest in Unit Trust?

As an amateur investor, you'll need to put in a lot of time and effort to maintain your portfolio of investments by keeping up to date with market movements and world news to decipher how each event will affect your investments. You will also need to make your own decision on when is the best time to buy or sell your investments.

If you're not that investment-savvy (yet), you can start out by relying on the expertise of professional fund managers to manage your unit trust investments for you.

Sounds great! But is it expensive for a fund manager to manage my funds for me?

There are few different types of fees and charges to look out for when investing in unit trusts. Do make sure you thoroughly research all the potential fees and charges before you begin investing.

Examples of fees and charges you may come across when investing in unit trusts:

Fees are usually charged as a percentage of your investment. So for example if you plan to invest RM1,000 in unit trust with a 1% upfront sales charge, you will need to fork out an additional RM10 when making a unit trust placement.

How can you start investing in unit trust?

There are a few ways you can start investing in unit trust. You can choose to invest via a unit trust consultant, investing directly online via Goal-Based Investment on Maybank2u/MAE or by visiting a bank branch.

Got a question about Unit Trust? You can send us a DM on @mymaybank or email us at mgcc@maybank.com.my to find out more. Want to speak to someone before you invest? You can make an appointment with us here.