Why I Invest in Unit Trust

Since I was young, my parents taught me to save money. Back then, whenever I have savings especially after Hari Raya, I will bank in the money into my ASB account. Being a kid, I actually didn't see the purpose of saving money let alone growing them. I just thought it was something noble to do. Maybe I will need it later. For what, only time will tell.

When I started working, I began to search for something fulfilling to invest in. Of course I wanted something that gives high return. Things that came to my mind at that time was stocks. I started to learn about stocks. Somehow along the way, I came across about Futures. I attended classes by a guy from CIMB. I tried to learn about all the technical stuffs. Graphs, candlestick etc. But along the way, I found out that I can't actually understand all these stuffs. It seems that I'm pretty bad at reading graphs and projecting what's going to happen. At last, I didn't even invest a single cent in Futures.

When I went to a property expo in Midvalley Megamall back in 2006, I came across a unit trust agent. He was promoting a new fund. To be frank, that was actually the first time I heard about unit trust. Without realizing it, ASB is actually a unit trust which back then I thought was just a normal bank account where I can keep my money and collect dividends yearly. He explained to me about the fund he was promoting. It impressed me that unit trust can actually generate returns of about 15% per year. I only understood about returns at that time.

Being new and skeptical, I went back and asked my friends about this particular unit trust management company. My friends gave good remarks about the unit trust management company. So there I go with my first unit trust investment. I started investing without knowing too much about unit trust. Only after being an investor did I learn more about unit trust.

What seems to be easy about investing in unit trust to me is that I don't actually have to crack my head on what stocks to invest in. I only need to choose a theme and put my money in. If I like Malaysian stock market, then I just choose a fund that invest heavily in Malaysian stocks. If I like China stock market, there are China funds available. If I like property market, there are Real Estate Invest Trusts (REIT) to choose from. All the stock selection will be done by the fund manager. As long as I choose a good fund with a good fund manager in a good unit trust management company, that should be good enough.

Even though the service charge for unit trust is quite high, 5% to 6%, I believe it's money well spent since I don't have the expertise to pick good stocks. The fund manager will do the thinking for me. Bottom line is I must make money from the investment. Not to say I can leave it entirely to the fund manager. As long as I know what to do and when to do it i.e repurchase/switching, I should be fine. I set my long term goal and I use unit trust to achieve it.