Sunday, June 8, 2008

Switch - Reinvest in Other Unit Trust Scheme

A unit holder may request that the proceeds from the disposal of his or her units be reinvested in another UTS offered by the same Unit Trust Management Company. This transaction is called 'Switch', and may be broken down into a repurchase of units in one Unit Trust Scheme and a sale to that investor of units in another Unit Trust Scheme.

The processes are largely the same as those described in section 3.2 and in this section, except that the payment for units repurchased by UTMC s automatically processed as the application amount for units in the second UTS.

Often a switch will be in an investor's best interest as UTMC may reduce or waive the fee on application for units. A switch will be useful in varying a client's portfolio as a result of changing market conditions or personal circumstances.

However, the person who is dealing in unit trust PDUT must be aware and also inform that although switching fees may be waived, sales charges may be incurred.