[PART I]
A unit trust fund is a common pool of money that are professionally managed, into which
investors with common investment objectives place their contributions that are to be
invested, in accordance with the stated objective of the scheme. In other words, unit trust
funds are a form of collective investment that allows investors with similar investment
objectives to pool their funds in a portfolio of securities or other assets. It is simply a
financial intermediary or financial vehicle. Such a scheme usually aims to provide aboveaverage returns, in the form of income distribution and capital growth with reasonable
risks, to medium-to-long term investors through investing in a broadly diversified
portfolio of stocks and bonds.
You are required to provide in-depth explanations on the following:
a) What is a Unit Trust Fund?
b) How does a unit trust fund operate? Explain and draw the structure
c) What are the differences between Unit Trust Funds and Mutual Funds?
d) What are typical charges and fees imposed by unit trust funds?
e) How is unit trust fund priced? Provide an example of the Net Asset Value (NAV)
calculation.
f) What are 2 types of returns can you expect from investing in unit trust funds?
g) What is Dollar Cost Averaging (DCA)? Provide an example of the DCA.
h) What are the advantages and disadvantages of investing in unit trust funds?
i) What are types of Conventional unit trust funds commonly available in Malaysia?
Sample Solution
