How to make money from unit trust?
Posted in Wealth Building on September 9th, 2010 by admin
Due to poor law enforcement by regulator and unethical selling technique employed by some unit trust agent, some member of the public had in fact lost confidence to the industry itself. When an investor being approach by a unit trust agent or personal financial executive, the very first response the agent will get might be “unit trust? i don’t believe in it” sad to said this investor do not have the knowledge and understanding before making such a statement; but true enough some investor are being taken advantage of by some agent or personal financial executive that do not provide sufficient information to the investor to make a sound decision which lead to a remark like this; now i will explain how an investor like you and me can make money from unit trust in a smart way.
The first thing investor need to do is, ask yourself one simple question “Am i really prepared to make mid-term and long term investment” while most investor do not understand that for most unit trust investment it has to be long term investment commitment and not a short term commitment as claimed by some agent who simply wanted to make some commission out of your pocket. Investor need to understand that for every transaction, there will be a “service charge” that is chargeable by the financial institution or bank every time investor wish to make a “top up” investment or on first investment, in Malaysia usually it will ranging from 0.25% to 5.5% depending on the type of unit trust you purchase and thus the moment investor buy in some margin already being taken by the financial institution or bank, plus an annual fund management fee that is chargeable every year these annual management fee ranging from 0.375% to 1.80% that will be deducted from the units that the investor hold during the tenure; in addition an annual trustee fee is also payable ranging from 0.035% to 0.08% depending on the type of funds investor invested in. With all this charges it is understood that for the fund to realize profit it have to be a long term investment for the fund to growth for some times then only investor can realize the profit from these investment. Read more »