UTS is a professionally managed collective investment scheme that pools your money with that of thousands of other investors. The specialist investment managers will invest the money on your behalf. For investor who is unable or unwilling to research and analysis investment markets, UTS is an ideal way of investing.
The Benefit of UTS
· Professional fund management, with expertise and resources, manage your money for you, reduce your own risk.
· Diversification, spreading risk over a broad portfolio of stock or bond in different companies, sectors, countries or regions. So, the investment risk will be reduced.
· Low capital/principal, as little as RM1000, you can assume the buying power of millions of ringgit; invest in property and share market need a large numbers of capitals.
· Liquidity, the unit holders may redeem all or part of their investment on any business day and receive their proceeds within 10 days; you need a buyers when you need to sell your property or other investments.
UTS is a invest instrument for the smaller investor to accumulate capital over the longer term.
The risk/return of UTS is in between the stock market and bond.
Investors can enjoy their investment with professional planning and different portfolio.
The Disadvantage of UTS
Any investment involves risk. Because of diversification, the return also is reduced if some sectors have a great growth. So, the fund manager must invest in accordance with the deed and prospectus even if the market conditions or investment ‘fashion’ change. Different portfolios of UTS have different risks; investors should invest according their own objective. There are fees and charges payable by investors in UTS in range of 5% to 7%.
The Categories of UTS
There have some categories of UTS below with descending of risk:
1. Equity Fund – invest in share market.
· Small Capital Fund – limitary of capital - High risk
· Growth Fund – Invest growth and potential share – High risk
· Dividend Fund – Invest in high dividend fund - Moderate
· Select Fund – better performance with experiential fund manager.
· Index Fund – closely with particular index listed in bursa.
2. Balanced Fund – Invest in share market and also bond market according the ratio in prospectus. Commonly 40% - 60% will be invested in share market only.
3. Bond Fund – Invest in bond market. These funds have lower risk and steady return. Bond fund normally is income fund, so distribution will be done in certain period. The features of bond fund is low risk, investors will invest in bond fund when the downturn of share market.
4. Money Market Fund – Invest in debt，low risk profile.
Syariah-based UTS – all the categories of UTS invest with syariah principle. Do not invest in gambling, conventional banking, tobacco…
Fees and Charges in UTS
· Service charge; different company with different charges, only need to pay once. The service charge of equity and balanced fund is 5-7%, 0-0.25% for bond and money market fund.
· Management fee; around 1.5-2.0%, calculated on the gross net asset value (NAV).
· Trustee fee; around 0.05-1%, calculated on the gross net asset value (NAV). Trustee is third party in UTS, they is safeguards to investors. The investment share market is under trustee name.
· Switching fee; Investors able to switch the capital between the UTS under the same company. When downturn of share market, investors will switch their fund from equity fund to bond or money market fund.
Terms & Conditions
At least 18 years old, you can invest in UTS. The minimum capital is depending to the fund. The prospectus of fund must state clearly about the minimum invest and additional invest. Normally is RM1000.
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The first step invests in UTS not the previous performance of fund, but the risk of the fund. If bearable of risk, why don’t invest in UTS. I’m strongly propose invest in UTS is better than invest in fixed deposit or savings account.
The cooling-off right, to be exercised within six business days, first time investors have the right to refund their application money without deduction of any charges.
Invest in UTS can achieve increment of capital, and also to realize the personal financial planning about retirement and child’s education fee.
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