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A unit trust is a form of collective investment constituted under a trust deed. In Malaysia the first unit trust was established by a company known as Malayan Unit Trust Ltd in 1959.Malaysia introduce the unit trust concept earlier than its Asian neighbours. Malaysians can now invest unit trust online opportunely via FundHYPERLINK “” supermart. Fund supermart provides regular investment update in the form of weekly email newsletter and quarterly magazine only to their investors.

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Unit trusts are open-ended investments, therefore the original value of the assets is always directly represented by the total number of units issued multiplied by the unit price less the transaction or management fee charged and any other associated costs. Each fund has a specified investment objective to determine the management aims and limitations. An investment company which purchases a fixed, unmanaged group of income-producing securities and then sells shares in the trust to investors. The major difference between a Unit Trust and a mutual fund is that a mutual fund is actively managed, while a unit investment trust is not managed at all. Capital gains, interest and dividend payments from the trust are passed on to shareholders at regular periods. If the trust is one that invests only in tax-free securities, then the income from the trust is also tax-free. A unit investment trust is generally considered a low-risk, low-return investment. Some investors prefer Unit Trusts to mutual funds because Unit Trusts typically incur lower annual operating expenses. However, Unit Trusts often have sales charges and entrance/exit fees. It also called fixed investment trust or participating trust or Unit Investment Trust (UIT)

Characteristics of Unit Trusts

A unit trust is formed when investors invest their savings to form the trust and it gets dissolved when investors withdraw money from it. By participating in a unit trust, investors accrue greater benefits from their investments than what they would have earned from direct investment in company shares. Investment in unit trust comes with higher financial security and greater economies of scale. Investment schemes like unit trusts encourage investors to participate in equity, derivatives, debt, and money markets. Be it a regular income growth or capital growth, unit trust takes care of all types of investment objectives. Unit trusts are preferred due to their easy affordability, and excellent liquidity.

Unit trusts are characterized by following features:

  1. These are open-ended schemes of investment
  2. Each unit trust scheme comes with distinct set of investment objective
  3. These trusts are designed as per the financial limitations of investors
  4. Investors investing in unit trusts have ownership in the trust assets
  5. Unit trust is managed by a fund manager, who maintains the trust and tries to improve profit level

Unit trusts can be categorized into two different units as follows:

  1. Accumulation units are those that accumulate interest and dividend within the trust and add value to the trusts fund.
  2. Distribution or income units on the other hand, distribute dividend or interest among the unit holders on a previously fixed date.
  3. Creation and cancellation prices of a unit trust do not match with the offer price and bid price at all times. Profit that is earned from the difference between creation and cancellation prices of unite trusts is termed as box profit.


Unit trust is getting popular nowadays due to potentially higher return when compare to fixed deposit or EPF saving. Furthermore, EPF is providing an option to withdraw some or your EPF saving for the purpose of investing in unit trust.

If you still wondering whether to invest in unit trust or not, you should see the reason why you should. As mention on the above, Unit Trust being well-diversified financial instruments, they are less risky than if you were to invest in individual stocks. You can gather investment opportunities from all over the world, as they are invested globally and into different financial instruments. They are managed by professional fund managers who aim to obtain higher returns for your money. You do not need to monitor equity markets closely for fluctuations.

Some more, there is a wide selection of unit trusts available to meet the different investment objectives of investors. If you staying invested over time, these returns can compound to very attractive amounts, unlike savings deposits.


From the discussion on the above, we know much knowledge from this assignment and we know that Unit Trust is an investment that considered a low-risk, low-return investment compare with other investments. There are a number of companies are providing Unit Trust for people to invest, and more and more people to invest nowadays.

Advantages of Unit Trust investment are more than disadvantages even it still have some risks.

In a conclusion, they are two types of people should invest Unit Trust: If you have no time or no interest to invest and to research yourself and other one is f you are high income earner like doctors, famous artists, etc. that you can earn more by spending your time on your tasks instead of investing.

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