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CONT....CHAPTER 7 : INVESTMENT PLANNING (ADVANTAGES OF UNIT TRUST…
CONT....CHAPTER 7 : INVESTMENT PLANNING
INVESTMENT IN UNIT TRUST
Objective : to get a certain level of return and with an acceptance level of risk.
It is an investment in which the funds are pooled and then invested.
The fund is unitised and the investor/unit holder, holds a certain no. of units. The 2nd party (manager) is responsible for the day-to-day running of trust and for investing the funds.
factors to be considered when deciding to invest in a unit trust
understand your risk profile and decide whether it is suitable for you
check on reports on investment Outlooks
evaluate the track record of a fund manager
make sure to read the prospectus
continue to review the fund manager performance by reading the reports.
TYPES OF UNIT TRUSTS
Conventional Unit Trust
Equity Funds
Exchange Traded Funds
Money Market Funds
Balanced Funds
Fixed Income Funds
Syariah Funds
ADVANTAGES OF UNIT TRUST
Minimized risk
Liquidity
Safety and less monitoring
Advantages of compounding
Diversify the risk
Low capital requirement
DISADVANTAGES OF UNIT TRUST
Lack of experience
Lower return
Lack of publicity