They are many types of investment such as REIT, equity or stocks, and others. Apart from that, Unit Trust is a popular form of investment. In Malaysia, the history of Unit Trust dates back to 1959 when the first fund, Malayan Unit Trust Ltd was launched. The industry are now almost age 5 decades. Unit Trust also is a well preferred vehicle investment for Malaysians’ savings to achieve their goals and retirement planning.
Unit Trust can be defined as a pool of investment from many individual or corporate investors with similar investment objective. The investment process of Unit Trust includes the Unitholders, Unit Trust Managers and Trustee. The fund of the Unit Trust will go into diversified portfolio investment which finally end with the Capital Gains and Distributions back to the Unitholder.
Unit Trust also mean an unincorporated mutual fund structure that allows funds to hold assets and pass profits through to the individual owners, rather than reinvesting them back into the fund. The investment fund is set up under a trust deed. The investor is effectively the beneficiary under the trust. The success of a unit trust depends on the expertise and experience of the management company. Common types of investments undertaken by unit trusts are property, securities, mortgages and cash equivalents.
According to CCH Australian Business Advisers Guide, “Not so long ago, unit trusts were primarily used to gather together investors to pool their (usually) small sums with a (usually corporate) trustee for the purposes of investment. In recent years the importance of unit trusts has grown to such an extent that they have in many respects supplanted companies as the most common vehicle through which business is conducted in the non-public company area.”
In the U.K. the term “unit trust” is synonymous with “mutual fund” as it is used in North America.
In a company you get shares. In a Unit Trust you get Units. The number of Units yo hold determines your share of the income and voting power. A Unit Trust is cheaper and more flexible than a company set up cost. The government charges lots of money to keep a company going each year. Buying shares or units in Unit Trust is one of the ways in slashing taxes. Invest in dividend yielding shares if your tax bracket is above 26%.
“The single tier dividends is intended to simplify the tax filing process for individuals,” says Chua Tia Guan, Executive Director and Head of Tax and Financial Planning at Great Vision Wealth Management Sdn Bhd.
