Types of Unit Trust

My very first investment was Unit Trust, back in year 2002. At that time, I did not understand Unit Trust so well like I do now. What I understood back then was just it’s a good savings and investment plan. My first Unit Trust was Public Mutual – Public Islamic Equity Funds. At that time, I did not bother to find out what would this Unit Trust invest in but I just believed that Public Mutual is a very good company and my money will be managed well.

Now that I have gained more knowledge about Unit Trust, I know that my first Unit Trust was the aggressive equity funds. Generally, we can categorize Unit Trust by Risk Profile and Investment composition.

Risk Profile

• Aggressive: Higher risk with potential higher return, meant for people with big risk appetite.
• Moderate: Medium risk with moderate return, meant for people who can take reasonable risk.
• Conservative: Low risk with fair return, meant for people who are risk averse.

Investment composition

• Equity: At least 65% of the funds are invested in stocks and the rest of the funds will be with other investment instruments like Bonds, etc. (Aggressive)
• Balanced: Funds will be equally split between stocks and other lower risk investment instruments. (Moderate)
• Bond: Main investment is with different type of Bonds, usually promise with fixed and steady interest income. (Moderate To Conservative)
• Money Market: Main investment is with financial instruments like Certificate Deposit, Treasury Bills, etc. (Conservative)

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