Why do people invest in Unit Trust?

Sorry that I can't seems to write and post lengthy articles without resorting to copy and paste some good articles that I found while browsing the internet.

Honestly, I don't have much time to write.

But if you happen to read them in my blog,that is because I purposely put them on display because I believe the article is good and they had inspire me while I catching up with unit trust consultation and managing my kids here in there during the day.

Today I found this from somewhere, and it really makes me ponder

"Thousands of people are attracted to invest in unit trusts every year. These investors come from all walks of life ranging from housewives, pensioners and business people (who have the cash) to contributors who have their EPF money in Account one.

What attracts these people to invest in unit trusts?

Most investors, I believe, are attracted by the potentially higher returns promoted by unit trust consultants (UTCs) and their unit trust companies (UTMCs). After all, these investors were not too happy over the low rates of returns of 3.7% or 5.04% (5 years’ average for 2003-07) paid respectively by their banks for fixeddeposits and the Employees’ Provident Fund for dividends. Another valid reason is that investors wish to include unit trusts as a component in their asset allocation model to diversify their investment’s portfolio risks. Unfortunately, not many investors achieve their objectives of a higher return. Many in fact, lose money, probably because they do not have the knowledge, skills, patience and time to monitor and re-balance their investments when market conditions change.

How, you may ask, can an investor lose money in unit trusts when the research analyst, the fund manager, the unit trust management company (UTMC) and the unit trust consultant (UTC) look after his or her interest? There is, of course, no direct answer to the above question. There is also no such thing as a perfect situation where everything will turn out right all the time. Research, if not thoroughly conducted can go wrong. Asset allocation, if not skilfully conducted, can also go wrong. Market conditions can also change, affecting the performance of an investment portfolio.

These are the risks that one has to take when making investments. However, one thing that can be quite certain is that the UTMC will never encourage investors to sell regardless of the market conditions, as this amount to not doing business and may reduce their income substantially.

Dollar cost averaging and switching to lower-risk products are commonly advised to help you stay invested. Of course, other options exist, which investors can consider on their own.


Only two parties are now left to do the job, the UTC and YOU. Many concerns arise here. First, can the UTC do the job by looking after your interests? Some may and some may not as there are trailer commissions to sacrifice. Second, is the UTC knowledgeable and experienced enough to give proper advice? Third, as an investor, you may have deviated from the original investment plan over time, or did not heed the advice of the UTC. Fourth, you may have changed your UTCs many times for personal reasons, and are therefore unable to follow a common plan for your benefits. The list can go on and on. Hence, the blame cannot be directed at anyone in particular, as many things might have changed during the course of the investment."

HERE the full article