In previous articles, we already touched on what a unit trust is and how it works. Most probably, you will have rough ideas of how unit trust works in Malaysia and what unit trust is. How about the benefits of unit trusts?
Let us now take a closer look at the benefits of a unit trust investment. You may consider investing in a unit trust after being well informed about this product.
If you don’t follow what unit trust is, please have a read first at Unit Trusts, The ‘Safest’ Investments For Beginners In Malaysia?
Benefits Of Investing In Unit Trust
What are the benefits of investing in a unit trust? ASB is one kind of unit trust investment. Keep in mind that ASB is only for the Bumiputera. How about the others? Does investing in unit trust profitable enough?
1. Managed By The Professionals
You know what? An expert is looking after your investment. Worry not, it’s better to have someone professional to take care of our investment portfolio rather than most of us who know nothing when it comes to investing.
Fund managers are responsible for managing and investing the pool of money from the investors. They’re skilled investors who understand the market, spending a lot of time analysing shares as well as the industry and economy at large.
They’re always on the market to be as fast as they can to take advantage of the market price movement. Would you be able to do that?
2. Diversification Of Portfolio
You have a small amount of money, but there are so many potential things that can be profited from your investment. Well, unit trust can help you diversify your investment portfolio. Diversification will help you to reduce your investment risk.
Let’s say you have 10 eggs. Would you place all your eggs in one basket or place them into a few different baskets? If anything happens to one basket, then what about the rest of the eggs?
The same goes for investment. If anything happens to one or more of these shares while you put everything in the same stock or industry, your investment portfolio will be affected. To reduce the risk, diversify your investment!
3. Liquidity
Most investors prefer their investment to be liquid. It means that the investment can be easily converted to cash. Unit trusts provide this feature. Any unit can be bought or sold easily. Some of the funds can return your investment to cash within the same day.
This option will help those in their emergency time to gain cash by liquifying their investment easily.
Unit trusts may be the best investment, especially for beginners but it will not suit every investor’s appetite. Make sure that you understand your risk and also the investment products before making any investment decision.
