How do you choose the right unit trust for you?
7 TIPS ON INVESTING IN UNIT TRUSTS
- Compare returns to its relevant index
- Watch out for high fees
- Don’t time the market
- If you choose to invest in unit trusts, hold for the long term
- There is always a risk of losing money
- Don’t forget to diversify your investments
- Remember, unit trust companies and consultants are there to sell you a product. It’s up to you to do your own research
- Quiz: Unit Trust
Don’t forget to diversify your investments
- Spread out your risk by having only a portion of your wealth in any single unit trust. You can also consider investing in several different unit trusts or in other investments as ways of spreading out your risks.
- Consider ETFs or ‘Exchange-Traded Funds’. In western markets, there is increasing pressure on fund management companies to reduce fees. This has caused an increase in demand for ETFs which have similar benefits as a unit trust but with much lower fees and the ability to make changes without incurring such high costs.