By Christopher Walker
Chief Executive Officer – JMMB Fund Managers Ltd.
In a bid to provide clients with alternative investment solutions and respond to the changes in the regulatory environment, local financial institutions have introduced several collective investment schemes (also commonly called unit trusts and mutual funds) over the last financial year.
A unit trust is an independent trust structure that allows investors to invest pooled funds into a common range of assets. These investment structures are established under a trust deed, overseen by independent trustees and managed by a team of financial experts (called fund managers), according to the parameters outlined under the trust deed.
Investments are divided in units, upon initial purchase. Investors, therefore purchase units at a price determined by the value of assets held by the fund, prior to entry. Income/Gains are generally reinvested into the fund, resulting in appreciation in value of units held by investors (unit holders).
THE BENEFITS OF INVESTING IN UNIT TRUSTS
Investing in unit trusts provide an excellent opportunity to maximise returns including:
• the full upswing in asset prices (net of fees), these funds generally outperform, over the long-term, their respective benchmarks such as inflation, devaluation in the local currency, the stock exchange, etc.;
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