Over time unit trusts have attained enormous popularity world over. Like any other type of investments, they have their share of advantages and disadvantages. However, below are some good reasons to consider when you are making your decisions to invest in Unit trusts.
- Investment Safety: Unit trusts are highly regulated, and investors can be confident that, while they are subject to investment risks, they are not likely to be victims of fraud and embezzlement. Each Unit trust is required by law to have three separate arms of control namely, the fund management company, the trustee, and the custodian. This governance structure provides valuable protection for investors in unit trusts.
- Transparency: Unit trusts are required by law to be more “transparent”. The level of disclosure expected of Unit trust has won the confidence of most investors. For instance, they are required to disclose in the key facts sheets their performance for at least 3 years, fees charges, risks involved, and details of any profits distributed in the period etc.
- Professional Management: Not everyone has the time, resources, and aptitude necessary to monitor their own portfolios. Hence, by investing in Unit trusts you entrust this task to professional fund managers employed by management companies to help you make the most of your investment plans.
- Convenience and Liquidity: Unit trust investments are easy to buy and easy to sell. Usually, done through the bank, agent, or directly from the unit trust management company. Further, investors can easily change their asset allocation as their personal circumstances change, by easily switching across portfolios.
- Affordability: Investors can choose to invest in Unit trust funds either by monthly debit order or with a lump sum. Usually, monthly debit orders start from a minimum of K500 while that of lumpsum may start from K20,000 depending with an individual fund manager.