A larger pool of funds allows the fund manager managing unit trust scheme to purchase a wide range of investments. Rather than limiting an investment portfolio to one or two investments, a portfolio comprising many investments can be held.
Unit Trust Scheme investors therefore may benefit from the "portfolio effect',i.e generally, the greater the number of investments, the less volatile (variable) the investment returns will be.
In other words, for investors unable to acquire a wide range of investments because of limited savings, investment in unit trust implies less risk.
Unit Trust Scheme investors therefore may benefit from the "portfolio effect',i.e generally, the greater the number of investments, the less volatile (variable) the investment returns will be.
In other words, for investors unable to acquire a wide range of investments because of limited savings, investment in unit trust implies less risk.
