Shares & Derivatives
Investing in Unit Trust
By Tan Kin Lian  •  April 29, 2008
By: Tan Kin Lian Dear Mr. Tan, Is unit trust a complicated product? Do you recommend investing in a unit trust? REPLY Tan Kin Lian picture A unit trust is generally a simple product. Your money goes into a fund which is invested on behalf of all the investors. The fund manager has to disclose the following: a) Upfront spread b) Expense ratio (i.e. the annual charge) c) Scope of investment. It is best to invest in a unit trust that has no spread, i.e. the same price is used for buying and selling of each unit, or a spread of not more than 1%. You should choose a fund with low expense ratio, less than 1% per annum. If you select a unit trust that has a high spread and expense ratio, you have to be sure that the fund manager is able to produce a better return compared to the market. Usually, it is difficult to make this judgement. Read more...
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By Tan Kin Lian
Mr Tan Kin Lian (fomer NTUC Income CEO) started his insurance career in 1966 in a local life insurance company. He has also worked in various positions as a computer programmer, organisation and methods officer and consulting actuary. Mr Tan writes daily in his blog. The information in his blog is transparent and has an open approach.
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