5 Reasons Why I Invest in Unit Trust

For this post, I will be sharing the reasons why I invest in the unit trust.

If you read my earlier post on my first unit trust investment, Public Dividend Select Fund, I did mention that before I decided to place my first unit trust investment, I had done quite extensive online research on unit trust and mutual fund investment.

I would be happy to share some of the findings, which later become the reasons why I invested in the unit trust.

5 reasons why I invested in the unit trust

Here are the 5 reasons why I invested in unit trust:

1. Unit trust investment offer moderate risk

Firstly, I am not a high-risk taker.

I consider unit trust investment provides me with the right risk level, which is a moderate risk.

This is in comparison to fixed deposit which is very low risk and share trading which I consider high risk.

2. Diversification of my investment portfolio

Secondly, I wish to diversify my investment.

If you read investment books or articles, I realised one of the things which always mentioned by the authors or financial planning advisor is to never put all your eggs in one basket.

So, my unit trust investment is another basket for my eggs.

3. Unit trust investment offer higher return of investment

Thirdly is because of the possibility of a higher return on investment.

I learned that over the medium to long run which is between 3 to10 years, the unit trust provides a much higher return compared to fixed deposits. For this, you might be interested to read my sharing on the comparison between a fixed deposit placement vs one of my unit trust investments.

But again, I am aware that the return on investment also varies based on the type and risk of the invested fund.

4. Unit trust offer affordable initial investment

Next, it is more affordable to invest in the unit trust compare to other types of investment such as investing in the stock market.

For most unit trust funds in Malaysia, the initial investment is RM1,000, which is affordable for wage earners like me.

As for the additional investment, mostly the is a minimum RM100 per transaction.

I would consider this as an easy and affordable learning step for those who wish to try investing their money.

5. Convenient investment method

Lastly, I find that it is convenient to invest in the unit trust.

In the 2000s, for an initial investment, you just need to fill in the form and prepare the amount you wish to invest. The payment mode could be in cash or cheque.

Then, you pass the form and payment to your unit trust consultant. Alternatively, you may directly go to the respective unit trust offices to proceed with the investment.

Within about 2 weeks time, they’ll send you the details of your unit trust investment details.

But now, with the advancement of digital technology, you can literally open a unit trust investment online. And you may do the transfer online as well.

For additional investment, you may repeat the procedure above or arrange for a Standing Instruction (SI) with your banks to transfer a certain amount from your bank account to your unit trust account on monthly basis.

Final thoughts

In summary, the above 5 reasons are convincing enough for me to explore further and start my unit trust investment.

Since my first unit trust investment, I had also invested in other unit trust funds managed by different unit trust providers.

Do you have an investment in the unit trust? Feel free to share why you invest in the unit trust.