Basic Introduction to Unit Trust

What is Unit Trust

Unit Trust is a kind of fund that allows investors to pool their savings together for similar investment objectives. This fund is then managed and invested in shares or other financial assets by professional managers such Public Mutual Berhad. Unit Trust is also known as a collective investment.


  • Professional management

Unit Trust fund is managed by licensed, professional fund managers. These fund managers have the knowledge, experiences, and skills to optimize performance of investors resources. They relieve the investors of the stress of day-to-day management and decision making in process trading financial assets.

  • Diversification

This is a risk management strategy to minimize investors’ risk exposure to just one or two financial assets. Unit Trust fund invests in a wide range of financial assets, across different asset classes, sectors, and geographical areas.

  • Liquidity

It is relatively easier to buy and sell Unit Trust as compared to buying and selling of other investment asset such as property.

  • Affordability

Investing in Unit Trust requires only a small capital outlay to begin. Individual could start to invest with as low as RM100.

  • Tax

Profits earned from the capital gain in Unit Trust is tax free

Types of Unit Trust Fund

Equity Funds

Equity funds invest majority of its money in the securities of companies listed in the stock exchange, to earn dividends and profit from capital appreciation. This type of funds is suitable for investors with a long-term financial goal or a longer investing time horizon. It is an excellent choice for those doing retirement planning or education planning for their children.

Investors can choose to invest in domestic funds, regional funds, thematic fund, or foreign markets funds, according to their needs and goals. It is important to discuss your plan with a qualified professional when setting up your investment portfolio.

Bonds or Fixed Income Fund

This fund invests in bonds. Bonds are debt instruments issued by the governments or certain corporation to raise capital for a certain project. For instance, the government may need capital to finance a project like building the MRT. Hence, they issue bonds to raise money from the financial markets.

Malaysian Government Securities (MGS) are bonds issued by the Malaysian government to raise capital for government expenditure. It pays a fixed interest rate over a long-term period. Islamic bond is known as SUKUK.

Bonds are relatively more stable than equities. They are excellent investment for retirees who want a stable income during their retirement periods.

Money Market Fund

This is short term deposits funds, an alternative to fixed deposits. It is relatively safe, low risk and highly liquid. This is an excellent choice for short term and risk averse investors.


Unit trust is an investment product to help investor achieve a certain financial goal, such as retirement planning. It is also an excellent choice for investor looking to diversify their investment portfolio and enhance the value of their money. To learn more about investing in unit trust, please send me a message HERE.

*Information are source from (1) Federation of Investment Manager Malaysia (FIMM) and (2)