Unit Trusts are one of the things I never invested in when I started working for years ago.  Back then, I made a conscious decision to invest in a bit of time learning a few things about finance. I promised my self that if I did not know how it works, I will not sign up for it.  I never understood how unit trusts work so I kept my distance.

But every other friend of mine have one. When I ask how they save, they tell me they have a unit trust with a particular financial institution. So this led me to dig deeper to how they really work and whether they are worth it.  Whilst doing my research, I came across something called a fund fact sheet.

If you  have money in a unit- trust or a fund of some sort, the fist thing that you should be asking your broker is your fund fact sheet. This is a summary of the key features relating to your  investment. In it, you will find what the fund is about, what your money is being invested in ( I.e stock or money or properties) , the fees that you are being charged as well as the historical performance of the fund including the distribution paid out over the years.

I had a look at most of the fund fact sheet available and you will be surprised at the top holdings the money is being invested in. This is important to know where your money is going to because as part of responsible investment you must not promote business that you do not feel like should exists. Let say you are a Christian and you do not think drinking should be allowed. How would you feel if you know that 50% of the fund that you have invested in is being invested in a beer brewing company?

So dear folks, let us not do the things we do not understand. Ask the right question and ask for time to go think about it. Now that I understand what unit-trusts are, how they work and how to read a fund fact sheet, I am glad I waited as I can now make an informed decision.

Be alert and know where your money is going.





4 thoughts on “Why I do not have a unit trust.

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