An equity fund invests mainly in the stocks of listed companies, and is the most common type of unit trust fund available to investors in Malaysia. People who would like to put their capital into listed companies can choose to invest in this type of fund. This also means that in general, the performance of Malaysian equity funds tend to move in line with that of Bursa Malaysia’s. For example, if the market rises, the value of the unit increases, and vice versa.
Islamic Unit Trust/ Shariah Funds
Shariah funds are almost similar to conventional unit trust funds, with the difference being the portfolios of these funds are invested based on Islamic principles, which means the investments can only be made in Shariah-compliant securities that are not involved in non-halal businesses such as gambling, alcoholic beverages and the production of non-halal products.
In addition, the fund also excludes shares of companies that are involved in conventional banking, insurance, or financial services. The returns offered by an Islamic unit trust will avoid the incidence of ‘riba’ (usury interest) through the process of cleansing or purification by the removal of such amount representing the interest element, which is then normally donated to charities.
SAMPLE OF EQUITY UNIT TRUST FUND CHART FOR 10 YEARS
The fund managers who take care of your unit trust funds have access to information and statistics from leading economists and analysts. Consequently, they are in a better position than individual investors to identify opportunities for your investment to grow.
Diversification
Effective Diversification to Minimise Risk and Optimise Return
Affordable and Flexible
The minimum initial investment amount is low as compared to investment in shares and/ or bonds.
Charges & Fees
Fees and charges can vary from fund to fund. Management companies are allowed to charge three types of fees.
Liquidity & Flexibility
An investor can sell his units, wholly or partially, at the following trading day’s unit buying price. Units have a high liquidity, that is, they can be readily converted into cash.
Security
Regulated by Securities Commission Malaysia (SC)
Risk
There are some potential risks of investing in unit trust
Ease of Transactions
Unit trusts provide investors with a simpler, more convenient, and less time-consuming method of investing in securities. The paperwork that comes with managing your own portfolio of shares and bonds are handled by the fund manager.
