What is a Unit Trust?
A unit trust consists of the pooling of money of various investors, who invest in financial markets, through a collective investment scheme, referred to as a Unit Trust.
Unit Trusts are known in many different markets, as well as market sectors, and might also occur where individuals invest across markets.
Unit trust-funds are considered a great way to either earn or lose money. One can manage a unit trust-fund properly, which is done by choosing the right place and methods to fund your investments. If, however, you invest your money in a marketplace that is prone to more risks, you can lose a lot of money. Before investing in anything, one must thus know exactly where your money is being invested into, as well as ensure your investment is secured and promises a good return.
Unit trust funds are made up of equal portions, which are referred to as units, and each one either has a net asset value or a price. This value depends on the assets that are being held within the fund.
These assets are generally made up of money market instruments or money, and can also be anything from shares, gold bullion, listed offshore shares, properties, governmental bonds, and sometimes even some form of equity.
How can you purchase a unit trust?
The best way to purchase a unit trust is to buy it through a company directly or indirectly through independent financial advisors, such as your local bank broker.
You may also purchase a unit trust from a trusted investment platform, that enables you, the customer, to invest through an administrative platform.
One can start off by investing a lump-sum, or a recurring amount each month, by paying with a debit order.
Investment fees for unit trusts
Upon investing in something such as a unit trust, you’ll have to pay fees upfront, which will make up a percentage of the amount you choose to invest.
It doesn’t really matter how you choose to invest, as fees should just be disclosed to you beforehand. You may thus be charged with upfront fees and depending on where you choose to invest your unit trust, sometimes even ongoing fees.