tag:blogger.com,1999:blog-7374629265881521816.post9154162967155129569..comments2023-10-20T21:51:53.494+08:00Comments on What Is Unit Trust Investment: How Unit Investment Trusts Work?Unknownnoreply@blogger.comBlogger2125tag:blogger.com,1999:blog-7374629265881521816.post-72599105804758722702008-03-30T01:35:00.000+08:002008-03-30T01:35:00.000+08:00Dear W.P Thatcher, in my opinion, Listed Unit Trus...Dear W.P Thatcher, in my opinion, Listed Unit Trust Scheme (Closed-End-Fund) has units quoted and traded on a stock exchange. The price of these units will fluatuate daily based on the supply of, and demands for, units from investor, i.e. it is the investors in the market who determine the buying and the selling price of the units.<BR/><BR/>Unlisted Unit Trust Scheme (Open-Ended-Fund) whose units are not quoted on a stock exchange. The selling and repurchase unit price are arrived at by first valuing the investments of Unit Trust Scheme and determining its NAV, and then dividing by the number of units in circulation.<BR/><BR/>A major disadvantage of Closed-End Fund is that the market price of a unit in UTS usually varies from the NAV of a unit. Generally, the NAV per unit of listed UTS is greater than the market price as it is usually traded at a discount. There are many reasons for this but, put simply, the price of any listed securities is determined by buyers and sellers in the market. The price of listed UTS reflects this rather than the NAV of the UTS. In unlisted UTS, the unit’s price is based on the NAV, so no significant discount or premium can apply.<BR/><BR/>Personally, I would say, even though in general (not necessarily) the Closed-End-Fund would give higher return of one investment, an individual should carefully assess his level of risk tolerance. In addition one should also carefully study his investment objective either it is a short, medium or long term types of investment. <BR/><BR/>For example an individual who are planning for his child education or his retirement fund, it is advisable for him to go for Unlisted UTS (Open-End-Fund) as the risk is lower. On the other hand an individual who planned maybe to purchase a dream house which he currently already has a house let say in 10 years time then he may be can choose to invest in Listed Unit Trust Scheme (Closed-End-Fund) as it might give faster and higher returns.<BR/><BR/>I hope this can help our readers in deciding which types of fund to invest in UTS and PLEASE…PLEASE…PLEASE read the UTS prospectus carefully before make any investment….<BR/><BR/>Best regards,<BR/>Pak MaehAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-7374629265881521816.post-53386086251075569462008-03-29T22:32:00.000+08:002008-03-29T22:32:00.000+08:00Why would one invest in a unit investment trust as...Why would one invest in a unit investment trust as opposed to a closed or open-end mutual fund?W. P. Thatcherhttps://www.blogger.com/profile/09419479080837612825noreply@blogger.com