There is no doubt that the world economy is very challenging at the moment. Some national economies are growing while others are going backwards. This seems to be the way of the 21st century so far and possibly represents a transition to a new type of global economy where the old ways become obsolete. So, if a person has funds and wants to invest in the future through the management of a diverse portfolio, what is the best way to protect that money and secure its growth?
What Is a Unit Trust?
In the simplest terms, a unit trust is a sum of money that is managed by finance professionals and invested into a variety of asset classes. The biggest difference between a unit trust and other forms of investment is that the unit trust includes the money of other investors. The pool of money available in a unit trust is contributed by multiple investors.
Every unit trust is managed and every trust specifies a range of investment objectives. One could, for example, place a sum of money into a unit trust that invests solely in real estate opportunities in Malaysia. The financial professionals managing this type of fund would invest in Malaysian-based properties for the purposes of growing the portfolio of investments.
The Benefits of Investing Your Money into a Unit Trust
Whether you are looking to invest in unit trust Malaysia funds or another trust, there are some very specific benefits to this type of financial opportunity, including but not limited to:
- Affordable: It is important to note that unit trusts are not just for high-stakes millionaires. Possibly the biggest benefit is that a person can buy into a unit trust with only a small initial investment and then build it over time. This makes it appealing to a much broader range of investors.
- Diversity: One of the biggest mistakes that many people make is investing into too few opportunities. For example, you could buy into the property market in a single suburb, but what if the bottom falls out of that market? Placing all of your faith and money into too few investment opportunities can expose you to too much risk. The solution to this is investment diversification. A unit trust will by nature invest in a wider range of opportunities, thereby minimising the risks of financial loss.
- Management: Many people choose to manage their own funds but this can lead to a number of issues including mismanagement. A unit trust is managed by investment professionals who are always looking for the best investment opportunities.
- Better Regulations: There have been recent changes to Malaysian law around the management of unit trusts. The end result is that investors are now even more secure when it comes to investing money into a trust such as
As difficult as the global economy is right now, there are still many ways to secure your financial future and buttress it against loss. Unit trusts represent a smarter way to invest and grow a portfolio of investments.