Unit Trust

In General, Unit Trust can be described as a group of finance related products (stocks, bonds, commodities, etc) that being managed by the fund manager. Compare with some other products such as Stocks or Warrants, this product is much more lower risk. But, remember that it doesn't mean no risks.

Each unit trust has a brief description which is quite important for the investor to be aware of, such as:

- What kind of products that it will be invested in? e.g. Equity.

- Geographical Allocation - e.g. Asia, China, Europe.

- Launch Date? The date this Unit trust being launched.

- Included under CPFIS OA / CPFIS SA (Singapore) - This indicate whether the investor can purchase the Unit Trust using their CPF Ordinary Account / CPF Saving Account.

- Fund Size - This indicate how big the size of this fund, how much people have invested inside.

- Fund Manager - Indicates Who manage this Unit Trust.

- Fund Charges - Initial Sales Charge (normally about 2% - 5%), Annual Management Charge (e.g. 1.5%). Usually, if you buy from the bank, the Sales Charge will be about 5%. If you use another service such as Fundsupermart or some other brokerages, they will charge you about 1.5% - 2%.

- Fund Performance - Shows the performance of this Unit Trust in the last 1 week, 1 month, 3 months, 1 year, etc.

- Latest NAV Price - This will be the current value / price for this Unit Trust
e.g. Current NAV: $1.5, and you decided to invest $3000 with the sales charge is 2%, you will have around ($3000 - 2%) / $1.5 = around 1960 units of this product.

Please take note that, usually the NAV written are the price for 1-2 days ago. So that, if you decide to purchase it today, the price might not be $1.5 which you can know 1-2 days later. It might be higher or lower depend on the fund performance.

- Risk Classification - High Risk High Return, Low Risk Low Return. Investor must choose product that suit with their risk appetite.

- Minimum Initial and Subsequent Investment - Minimum first time investment and minimum additional investment after that.


Notes: After you bought this unit trust, usually when stated in the portfolio it will shows the unrealized profit/loss around -2%. You do not need to worry about that, this 2% is actually the sales charge that incurred when you purchase this Unit Trust.

There are some of other things that investors need to know such as fund intra switching, fund inter switching (switch your current Unit Trust with another Unit Trust based on the current value) which they can find more details about it from the brokerage regarding the free switch, costs, etc.