What are the benefits of unit trust investment?

What are the benefits of unit trust investment?

       Unit trust offers a reasonable amount of return with minimal risk. For those clients who do not have the time, resources and aptitude to manage their own portfolios, investing in unit trusts is a viable alternative as their money will be managed by a professional fund manager. Unit trusts are perfect for the novices and busy people, since the funds pooled into unit trusts are managed by a fund manager equipped with the experience and know-how to properly diversify your collective investment portfolio. It’s a win-win situation, since you’ll be able to dabble in an investment vehicle with higher returns than fixed deposits, and your fund manager will be able to take a cut of your profits as payment rendered for his services. A unit trust spreads your money across many investments. This means that if one investment doesn’t work out, you won’t lose all your savings. The flipside of this: if one investment does incredibly well, your entire holding won’t rise in value to that extent. So, there is less risk, but less return. Still, you have the comfort of knowing it is unlikely you will lose all of your money suddenly.

Diversification

·         Many investors lack sufficient resources to establish an adequate diversification on their own

Funds with variety of objectives

·         Different types of funds are created for different investment objectives, so investors will have no problem in choosing the fund.

Record keeping services

·         The management company maintains and administers the records of shareholder’s activity for a given year which is a great convenience for investors.

High liquidity

·         Unit trust can be bought and sold easily, thus they do not suffer liquidity risk.

Professional management

·         Fund managers who are knowledgeable about investment and they have good track records of performance, high integrity.

Affordability

·         Only a small amount of money is needed to participate in a portfolio of investment which enjoys the same benefits as in direct investment which requires large amount capital.