Before we dwell deeper, you need to assume wealth creation as a voyage with a fulfilling destination. Think of your financial planner as an skilled guide who will help chart out where you wish to head, when you can reach your targets, and how you can arrive there while dealing with hurdles on route. Only then, will you further understand these wealth creation tools efficently.
Unit Trust Fund consists of a pool of funds collected from a group of investors with similar objective.
This collective investment fund is managed full time by professional fund managers. An investment portfolio typically includes equities, bonds and assets.A unit trust is a three-way relationship among the manager, the trustee and the unit holder. The manager manages and operates the unit trust fund, the trustee holds all the assets and the unit holder is the investor.
More and more investors today prefer unit trusts in comparison to direct stock market investing for many reasons.
They get to invest in a diversified portfolio and benefit from the expert management of fund specialists for an affordable capital outlay and minimum risk. Their unit trust investments are individually tailored to suit their specific needs and constantly monitored, saving valuable time and resources.
Of course, any investment comes with an element of risk. So it is always best to know which are your possible risk factors. We categorise investors based on four risk-profiles:
Aggressive – Investors who are willing to take higher risk to achieve higher return
Moderately Aggressive – Investors who desire higher return, but are cautious on the risk taken.
Moderate– Investors who want stable return with lower risks.
Conservative – Investors who see capital preservation as the main priority and only willing to take minimal risks
For each type of investors, there are specfic funds which they can select from
Risk profiling is a continuous process.
As a person’s priorities change due to different life-stages, we see a need to review his/ her risk profile from time-to-time to ensure its relevance. A good financial planner should be one that is always committed to continuously help you ascertain your risk profile that is compatible to your investment portfolio.
Interested and want to get started? Follow these quick 6 steps
Define your investment goals
Decide your time horizon and risk appetite
Understand the products
Practise Asset Allocation
Practise regular investment
Regularly review and rebalance your investment portfolio