Tuesday, May 30, 2023

Safe And Reliable – Unit Trust

I’m pretty sure you know that you can grow your wealth with investments. When you hear the word investment, do you think of stocks and shares? People get skeptical about stocks thinking that they will definitely lose money due to the level of risk involved. However, if someone tells you that there are investments that carry little or no risk; Do you think this is bondage?

Personally, I am not a fan of bonds or fixed income securities. Investing in bonds is a waste of time and sometimes money. However, the best investments that I really like because of the transparency and returns are Unit Trusts. Another term for Unit Trust is Mutual Fund.

A unit trust is a legal trust that holds investments and other assets for the benefit of unit holders sharing the same investment objective. The investment portfolio is managed by a professional fund management firm which strives to meet the investment goals of the unit holders.

Unit trust is divided into equal parts called units. Investors buy and sell these units from the manager of the unit trust. A unit trust is formed by a trust deed.

There are advantages and disadvantages of investing in Unit Trust. Actually any kind of investment has both advantages and disadvantages. Unit trusts serve those investors who do not have much financial knowledge on investments. As Unit Trust is handled by a professional fund management people who spend time and money to study about investments, I am sure that your money is in safe hands.

The advantages for Unit Trusts are affordability, professional investment expertise, diversification, liquidity, safety, convenience and adaptability. Other disadvantages to unit trusts are risk (all investments have risk), the level of attention and the high cost basis.

There are other factors to consider while investing in a Unit Trust but these are some of the features which can be considered the next time you invest.

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