Spreading The Risks For Small Investors (Part 1)
I found this very interesting article, I believe it was from The NewStraits Times, dated October 20, 1991. Allow me to share with the readers ya....
Q: What is a Unit Trust?
A: A Unit Trust is an investment vehicle which allows a fund management company to make investments on behalf of the individuals and instituitions that share similar financial objectives.
Q: How does a Unit Trust works?
A: It is based on a simple principle of dividing a fund into equal portions referred to as units and each unit represents exactly the same proportion of the value of the portfolio of the investments.
This means that in a fund where, for example, the investments in which it is invested are worth RM1million and there are 1 millioin units issued, each unit will be worth RM1.
Q: Why is it called a Unit Trusts?
A: It is a trust in the strictest legal sense, being based on a deed of trust made between the managers and the trustees. The trustees is also a legal owner and the custodian of all the assets.
Q: What are the advantages of investing in a Unit Trust to a small investor?
A: A Unit Trust allows the smaller investor to participate in a wide range of securities, thereby spreading the investment risk. A small capital outlay can be invested in as many as 40 different counters in the stock market.
He/She also enjoys and gains access to the expertise of experienced fund managers who not only manage the funds but also keep track of all the proper records.
Q: Is it safe to invest in Unit Trust?
A: The value of the units directly reflects the value of the underlying assets. In a falling market trend, the value of the units may well go down along with the share prices in general. However, a good fund manager should be able to limit the fall in the price of units. He should be able to perform better than the Bursa Malaysia (then KLSE Composite Index)
Q: What are the safeguards of investing in a Unit Trust?
A: Only a sound investments management can protect you from fluctuations in share prices, which are reflected in the value of the units. However, fund managers must abide by a set of rules and regulations governing the trusts as stated in the trust deed.
All funds must also have a trustee whose role is to look after the interest of the investors. The managers make the investment decisions on which shares to buy but the trustee holds the cash and securities on trust for the unitholders. If any money is misappropriate, the trustee could be liablefor negligence or breach of trust.
to be continue...
Q: What is a Unit Trust?
A: A Unit Trust is an investment vehicle which allows a fund management company to make investments on behalf of the individuals and instituitions that share similar financial objectives.
Q: How does a Unit Trust works?
A: It is based on a simple principle of dividing a fund into equal portions referred to as units and each unit represents exactly the same proportion of the value of the portfolio of the investments.
This means that in a fund where, for example, the investments in which it is invested are worth RM1million and there are 1 millioin units issued, each unit will be worth RM1.
Q: Why is it called a Unit Trusts?
A: It is a trust in the strictest legal sense, being based on a deed of trust made between the managers and the trustees. The trustees is also a legal owner and the custodian of all the assets.
Q: What are the advantages of investing in a Unit Trust to a small investor?
A: A Unit Trust allows the smaller investor to participate in a wide range of securities, thereby spreading the investment risk. A small capital outlay can be invested in as many as 40 different counters in the stock market.
He/She also enjoys and gains access to the expertise of experienced fund managers who not only manage the funds but also keep track of all the proper records.
Q: Is it safe to invest in Unit Trust?
A: The value of the units directly reflects the value of the underlying assets. In a falling market trend, the value of the units may well go down along with the share prices in general. However, a good fund manager should be able to limit the fall in the price of units. He should be able to perform better than the Bursa Malaysia (then KLSE Composite Index)
Q: What are the safeguards of investing in a Unit Trust?
A: Only a sound investments management can protect you from fluctuations in share prices, which are reflected in the value of the units. However, fund managers must abide by a set of rules and regulations governing the trusts as stated in the trust deed.
All funds must also have a trustee whose role is to look after the interest of the investors. The managers make the investment decisions on which shares to buy but the trustee holds the cash and securities on trust for the unitholders. If any money is misappropriate, the trustee could be liablefor negligence or breach of trust.
to be continue...
posted by GAM Ida Azerin at 12:32 AM
