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    • Unit Trust Q & A - Part 10

    Posted By tazamfn on August 25, 2008

    Q : Can Unit Trust performance beat the KLCI performance ?

    A : 3 Possibilities unit trust can beat the KLCI Performance…..

    Firstly, it depending on the asset classes. Since KLCI consist of local based assets, its is depending on the asset class is required in the Unit Trust Fund portfolio such as commodities or foreign stocks to outperform the KLCI. Also another way is to invest in an actively managed UT Fud. The third situation is whereby the UT Fund consists of instruments without correlation to the KLCI.

     

    Differences Unit Trust Fund and Stocks….

    Essentially, the main difference between the two UT Funds and stocks is the investment horizon. The recommended investment period for UT Funds tends to be for the mid to long-terms versus stock holdings which may range from the short, medium to longer term, depending on the type of stocks and objective of the investor.

    Comparison between Unit Trust and Stock Investment.

    Unit Trust Funds

    		 Stocks
      

    1. Recommended investment horizon is for the mid-to-long-term
    2. Professionally managed by expert Fund Managers who has access to real-time information.
    3. Diversified investment scheme which may dilute concentrated stock-risk
    4. Generally of lower volatility due to the diversification of investment holdings
    5. Allows for longer-term regular investments to beat inflation as it

    		   

    1. Tends to be speculative and for the short term.
    2. Self-managed based on delayed information sources.
    3. Concentrated risk due to the fact that money is pooled in just one or very few stocks.
    4. Tend to be highly volatile. Though levels depend on stock type.
    5. Irregular and unpredictable performance and returns, depending on stock type.

    All being considered, the investment decision still boils down to your objective(s), risk appetite and investment horizon. Most importantly..do your home work or consult a profesional to help you make the right decisions!

    Article source/about:

    The sun 19 Aug 2008/ Hwang DBS Investment Management Berhad is one Malaysia’s leading management companies for more info log on to www.hdbsim.com.my.

    About Me :

    Im the Unit Trust Consultants for CIMB Wealth Advisors Berhad who can sell the Hwang DBS Unit Trust Funds as 3rd party funds. Interested just contact me at 019-3649613 or email murtaza@cimb-wealthadvisors.info

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