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ABOUT UNIT TRUST

	Unit Trust Concept Benefits of Investing in Unit Trusts Risks of Investing in Unit Trust Fund Comparison with Other Forms of Investments Typical Investor Profile for Unit Trust Fund Management Expenses


	Unit Trust Concept

A unit trust fund is a collective investment vehicle, which pools investors' capital into a fund managed by professional fund managers. The fund will invest in the permitted investments in accordance with the objectives as outlined by the deed based on the prevailing Acts & Guidelines.


	UNIT TRUST CONCEPT


	Benefits of Investing in Unit Trust Fund

	Professional Fund Management
	The investment of the unit trust fund is managed by professional fund managers who perform in-depth economic and corporate research including identify opportunistic investments. They have access to various economic and corporate research materials.

	Diversification Opportunities
	Investment in unit trust funds provides an opportunity to spread investment portfolio of a diversified type of stocks and derivatives even with a small capital.

	Ease of Transactions
	This provides an investor with a simpler, more convenient and hassle-free method of investing in securities as compared to holding a portfolio of securities himself.

	Minimization of risks

	The diversification of portfolio spreads the investors ' risk exposure, over a broad portfolio of stocks and derivatives, which offer different type of risks / rewards.


	Liquidity

	Unit holders may redeem all or part of their units on any Business Day and have their proceeds delivered within ten (10) days.


	Risks of Investing in Unit Trust Fund
	General Risks
	Inflation/Purchasing Power Risk
	This refers to the decline in the purchasing power of the same amount of money over time. Therefore, any return lower than the inflation rate will reduce the value of the investment.

	Loan Financing Risk
	When an investor borrows money to purchase units in a fund, there is a risk of capital loss. The investor may be forced to provide additional fund to top up on the loan margins should the market go down or may suffer from the higher cost of financing if the interest rate is on an uptrend.

	Risk of Non Compliance
	The risk that the manager and others associated with the unit trust fund may not follow the rules set out in the unit trust fund's deed and internal policies, or the laws that governs the unit trust scheme, or will act fraudulently or dishonestly. Non-compliance may expose the fund to higher risks that may result in financial and/or non financial losses. However this risk is greatly reduced via proper establishment of the compliance and internal control policies.


	Fund Management Risk
	Poor management of a fund will jeopardise the fund's performance that may result in the loss of capital invested by the unit holders.

	Investment Risks
	Stock Market Risk
	The unit trust fund performance is subject to the volatility of the stock market, influenced by the changes in the economic and political climate, interest rate, international stock market performance and regulatory policies. The movement in the underlying investment portfolio will affect the price of units.

	Stock Specific Risk
	It refers to an inherent risk of a particular stock of the unit trust fund. Any major fluctuation of the stock price may affect the NAV of the fund and thus, influence the price of units. This risk can be minimized through portfolio diversification.

	Liquidity Risk
	The risk refers to the ease of converting securities with cash at or near its fair value which normally depends on the volume traded on the market. The risk is minimized through extensive research on stock selection and diversification.

	Interest Rate Risk
	Movements in interest rate may affect particularly value of fixed income securities, bonds and return on cash. Interest rate is also a general economic indicator of the country, which may affect the value of investment even if the fund does not invest in interest bearing instruments. Interest rate risk is managed through effective allocation of the fund.

	Credit/Default Risk

Credit risk refers to the ability of an issuer to make timely payments of interest/profit, principal and proceeds from realization of investments. The risk is mitigated through a prudent research process and close monitoring the issuer's credit profile.


	Comparison with Other Forms of Investments
	All investments carry some form of risk-return trade off. In general, risk and return comparison with other various investments may be summarized as follows:-

NO	Types of Investment	Risk Level	Expected Return Level
1	FINANCIAL DARIVATIVE PRODUCTS	HIGH	HIGH
2	PROPERTY	\|	\|
3	SHARES	\|	\|
4	UNIT TRUST	\|	\|
5	FIXED DEPOSIT	V	V
6	CASH	LOW	LOW


	Typical Investor Profile

NO	Types of Unit Trust Fund	Risk Level	Expected Return Level
1	GROWTH	HIGH	HIGH
2	BALANCED	\|	\|
3	INCOME	\|	\|
4	STRUCTURED PRODUCTS	V	V
5	MONEY MARKET	LOW	LOW

Investors of unit trust funds who have high risk tolerance may have aggressive investment outlook and favour high capital growth. Investors with moderate risk tolerance may favour investment with potential of higher return with acceptable level of risk. Conservative investors normally prefer investment that offers stability in term of both principal and income but recognize the risk of investing in the fund.


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	Management Expenses
	Annual Remuneration of the Manager and the Trustee

	Management Fee
	The management company may only be remunerated for its services by way of an annual management fee charged to the fund. The fee however may only be charged to the fund if permitted by the deed of the fund. In this regard, the deed should stipulate the maximum rate of the annual management fee chargeable to the fund.

	Trustee’s Fee
	The trustee may only be remunerated for its services by way of an annual trustee fee charged to the fund. The fee however may only be charged to the fund if permitted by the deed of the fund. In this regard, the deed should stipulate the maximum rate of the annual trustee fee and annual custodian fee (if any) chargeable to the fund.


	Direct Charges

	Sales Charge
	An investor is charged with an entry fee which is calculated based on the fund's NAV per unit. The sales charge is incorporated in the fund's selling price per unit

	Repurchase/Redemption Fee
	An investor may be charged an exit fee on repurchase/redemption of his investment. Normally, an exit fee is charged for redemption of investment in bond fund before its maturity.

	Switching, Transfer and Transmission Fee
	A fee may be charged on a unit holder's request to switch, transfer or transmission of units.