The Sun Tuesday September 2 2008 - Tell us your best tip on how to get started to invest in unit trust?

A1: Lee Tze Yan, Subang Jaya

1. Before investing in Unit Trust (UT) funds, I will check the company’s bakgroundof the said investment. This include a check on the shareholders, board of directors and the company’s investment and management team. To me, this is the utmost importance as I have to know who is being given the ‘mandate’ to manage my money. The simplest way is to browse the company’s website.

2. Secondly, I must also understand the fund’s investment objectives, its related strategies, current portfolio, and not forget its past performance, if any, as it gives me a rough idea of the risk level of the fund.

3. Next, I will also try to analyse the past performance of the fund. Hence, I will look for consistent performance over the long term. However, I do understand that past performance is not a guarantee for the future performance.

4. Lastly, I will take note of any specific features and constraints which may not meet my requirements. For instance, some funds might have policy of not distributing income or the minimum investment required may be much higher that what I wish to invest.


A2: Wan Azmi Wan Ismail, Sentul Utama

First of all, I would like to stress that UT funds differ from company shares or debentures. The underlying assets of the fund can comprise of a combination of local or global instruments such as shares, bonds, and money market instruments. The advantage of investing in UT funds is that professional fund managers are tasked with monitpring your investment portfolio and unlike shares, you need to monitor them on a daily basis. These managers have access to real-time information and research statistics from analysts and economists globally and should be able to make sound investment decisions.