Unit trust investments can include a single asset class or a range of asset classes such as equities, fixed income, property, or cash. Unit trust can also be invested in specific geographical markets, sectors, styles (for example, value, growth, small caps) or employ particular strategies (for example, Long-Short).
Unit trust are suitable for a variety of investors and for any investor who seeks diversification and professional management of their investments. There are many types of unit trust strategies with a related range of risk levels, so a fund can be a relevant solution for many different investment needs.
What are the features of a unit trust?
- Easy to get started – generally, an initial investment of $5,000 is enough to begin investing with most funds.
- Diversification – because a unit trust spreads or diversifies an investor’s money across a number of different securities or assets (something investors may not have the capital to do by themselves), it reduces his/her reliance on the performance of any one security or asset class.
- Professional Management – most people do not have the time, money or knowledge to research and maintain an investment portfolio. A unit trust offers the opportunity to tap into a fund manager’s resources, investment expertise and experience.
- Convenience – unit trusts offer a convenient and efficient approach to investing. All ongoing paperwork and administration is handled by the fund manager. This makes investing in unit trusts fairly low maintenance and hassle free.
- Regular saving plans – some unit trusts have the option of making regular contributions to them. During rising markets investors receive less units, whilst during falling markets investors receive more units in the fund. This has the effect of reducing your overall cost base, and is known as dollar cost averaging.
- Alternative strategies – sophisticated unit trust may engage in strategies which can make money in both falling and rising markets. Depending on the fund objective and strategy this could reduce losses in down markets.
- For your convenience, use this Fund Finder to search for your choice of unit trusts. Use it to compare your funds, access performance data, get historic prices and documents online.
What type of investor is a unit trust suitable for?
Unit trusts are suitable for a variety of investors and for any investor who seeks diversification and professional management of their investments. There are many types of unit trust strategies with a related range of risk levels, so a fund can be found for many different types of investors.
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