Unit Trust Malaysia

One of the most popular investment schemes in Malaysia today is Unit Trusts.  As more Malaysians invest in unit trusts, the more the industry continues to grow. A Unit Trust is an investment scheme in which a group of investors with the same investment objectives pool their funds to be administered by a professional fund manager for investment in a range of various securities or assets. The continued popularity of Unit trust is attributed to the improvement of unit trust products, relatively low level of risk, the growing wealth of the Malaysian public, the increasing knowledge of the public and the convenience of investing in different channels.

Mechanics of Unit Trusts

Unit trust investors have no direct ownership of the portfolio where trust funds are invested. Instead, the fund is divided into units of ownership entitlement whose value changes correspond with the value changes of the fund.  Earnings of unit holders is usually is expedited in the form of income distribution and capital appreciation, generated from the collection of assets holding the unit trust fund. Every unit produces an equal return. Thus, the number of units you invest will determine how much returns you will receive.

Unit trust is ideal for investors who don’t have time and the penchant to make direct investments or self-manage their portfolios. It is also for people who wanted to put their money in investment vehicles that is secure and reputable. It is also perfect for small income earners who don’t have enough money because unit trust provides them affordable admittance to a wide range of investments that may otherwise not be accessible to them.

For people aiming to maximise returns on their financial assets, unit trusts serves as a perfect scheme for them to achieve exposure to investments that can potentially yield earnings that is way bigger than simple investments like bank savings accounts and fixed deposit investments.

How to invest unit trust in Malaysia?            

Investing in a unit trust means buying units of a fund from a unit trust management company.  You simply have to go to the fund management institution of your choice and transact the specific unit trust fund you want.  When purchasing unit trusts, the investor signs a trust deed or the contractual agreement that specifies investor’s rights and fund manager’s responsibilities.

Lump Sum Purchases.As described, this involves buying a lump sum of trust fund which the investor can hold for a long period of time during which the preliminary investment will grow as dispersal and additional revenue is produced by the fund. When units are sold, the value of unit-selling price will increase as it reflects the initial investment and the earnings accumulated over the period.

Regular Savings. Some people invest in unit trusts by periodically or monthly contributions to their fund. This is a seamless methodical and practical approach to grow capital for future requirements. Periodic contributions can eventually accrue in a larger number of units over a period of time. One scheme through which regular savings to a fund is facilitated is the Private Retirement Scheme (PRS). Voluntary contributions of PRS members are administered by the Private Pension Administrator (PPA) while the funds are managed by eight (8) fund management institutions.

Pension/Retirement Fund

The most convenient way for regular income earners to invest in unit trust is through their pension fund’s Investment Scheme in which a part of their savings is allowed to be invested in a trust fund of their choice. Eligible members who wish to invest must simply fill up an Application Form which they can get from their approved Fund Management Institution of their choice and submit the requirements to facilitate the investment. They can invest up to 30% of their savings in excess of the basic savings amount and make succeeding investments every after three months in the same or other available trust funds.