Investing in unit trusts: Use this handy document to help you pick the right fund
There are a vast number of different unit trusts to invest in.
You can invest in different indexes and sectors of the stock market, property, bonds, commodities and fixed-interest funds. And different unit trusts have different investment goals.
So if you're researching the best unit trusts to invest in, where should you look?
Read on to find out…
Finding the perfect unit trusts to invest in
Many investors look to unit trusts
as an investment vehicle. Investing in these funds does have a number of benefits, but knowing which ones to invest in can be difficult.
To help you make a decision, you can use a unit trust’s fact sheet. These contain a wealth of information. They’re all available online.
Let’s take a closer look at some of the key information included in a fund’s fact sheet…
Objective and mandate of the fund
The important information contained in a fact sheet
In these two sections of a fact sheet, the fund manager will outline what the goals of the fund are and how it aims to achieve it.
Use this information when investing in a number of funds to ensure you’re not investing in more than one fund following a similar mandate. This will improve your diversification.
The fact sheet will rate the risk associated with the unit trust and give details on what type of investor it suits.
This means you can select unit trusts according to your risk profile.
It should also list the standard deviation in relation to its benchmark. This gives you an idea of how much volatility there is in the fund’s investments compared to the benchmark.
The fact sheet details what its benchmark is and the fund’s performance in comparison to this.
Of course, past performance is no indication of future performance, but it can give you an idea of how the fund manager has performed.
There is also a list of the fund’s investments. This shows you the sectors and shares the fund holds. This will tie in with the mandate of the fund.
The fact sheet also contains information on costs and minimum monthly and lump sum investment amounts.
If you focus on the above points, you should be able to whittle down the unit trusts you want to invest in. Then you can delve closer into fees and charges.
So there you have it. Why you should check out this handy document to help you pick the right fund.
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