Friday, 24 February 2017

What is Mutual Funds / Unit Trust

A few days ago , a few people came up to me and asked me what is Mutual Funds /  Unit Trust ( MF/ UT), hence my topic of the day. 

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So what is MF/ UT to you ? 

To some of us, it is a form of investment / another option to place you funds in to earn a better return. 
Then comes the next question. What is investment to you ? When we say we are investing into anything we are actually putting in some cash / time into something in order for us to earn a certain return. The return could be in terms of better interest / skills set / knowledge / etc... for our own future benefits. 

Yes, you got it right, MF / UT does gives a better return in general as to compare to fixed deposits and other instruments. The key here is we need to know our objectives on investment and the duration we need to achieve it. Why do we need a duration or a time frame ? Because that's only make it more meaningful. Investing is not an overnight thing its a medium to long term thing. 

* take a look at my older post for more insights*

Sp MF/ UT is basically a pool of funds collected from different individuals / corporate which is known by investors. Yes that's include me and you . If you are investing or plan to invest in MF/ UT then you are an investor or potential investor. 

Thereafter the pool of funds will be entrusted and managed by professionals which are known as fund managers. These fund managers will then select the company stocks that is suitable based on the risk tolerance of the funds and objectives of the funds as well as the types of the funds.
( equities , money markets, bonds, balance , mixed assets, index )

At the end of the day what we all are looking for is the return as i mentioned above. So how does the returns earns. Well in MF/ UT our returns are based on :-

1. Capital Appreciation 
Increase in the fund price 

2. Income Distribution 

3. Combination of (1) & (2)

Image result for advantages Benefits of MF / UT :-

1. Well Diversified - Different Asset Classes

2. Managed by Fund Managers

3. Lower Risk - Stocks Selections and Types of Funds

4. Liquidation - Redemption is able to be credited to your account in 5-7 working days

5. Flexible - Invest at your own pace ( monthly, quarterly , semi annually, yearly, additional investment, lump sum)

6.Legacy - Nomination to transfer the wealth accumulated to your love ones.

7. Affortable - as low as RM 1000 and monthly investment of RM100

8. Hedge against inflation and low interest risk.

9. Peace of Mind - Rest assure that it is well managed by the professionals

10. Better Funds Accumulations for the future.

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So here is some simple basic information you need to know about MF / UT . I hope it helps you in more understanding. If you would like to know more on the How to get started do not hesitate to contact me or email me at

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