This document contains information about unit trusts, including: 1. Definitions of unit trust and its key characteristics such as professional fund management and high liquidity. 2. Descriptions of the main types of unit trusts - equity, balanced, bond, money market and Islamic funds. 3. An overview of the typical unit trust process in Malaysia including the roles of the trustee, manager and unit holders. 4. Examples of four unit trust companies and some of their funds in Malaysia. 5. Advantages of unit trusts such as diversification and lower costs, and disadvantages like additional fees and potential liquidity issues.

1. FINANCE 2 (EIB10903)
No. Name Student ID
1. Ahmad Amirun Fitri Bin Abu Zaimah 62212121042
2. Mohamad Hafizuddin Bin Mohd Hanafiah 62212121043
3. Mohamad Shahidi Nasri Bin Mohd Soffi 62212121041
4. Muhammad Iqbal Bin Mat Rapi 62212121039
5. Nazrulhafiz Bin Zahudin 62212121040
Group 1 (ME20)

2. 1. What is unit trust?
UNIT
TRUST
An investment company that invests its
shareholders’ money in a diversified
Investor do not have a say on the
management of funds
Well managed by professional
portfolio of securities managed by
professional funds managers
return is low, since it is highly
diversified
Well managed by professional
High liquidity, can easily bought & sold

3. 2. TYPES OF UNIT TRUST
Equity Funds
❖ Equity funds invest mostly in stocks.
❖ These funds can then be subdivided into more precise objectives based
on the sorts of shares in which they invest.
❖ Among these goals are aggressive expansion, long-term growth,
dividend income, and growth and income.

4. TYPES OF UNIT TRUST
Balanced funds
❖ Balanced funds invest in both equity and in interest bearing securities; for
example, bonds and convertibles, in about equal portions.
❖ The investment is based upon the specified policies and investment
objectives.

5. TYPES OF UNIT TRUST
Bond funds
❖ Bond funds invest in debt securities such as government and corporate
bonds, thus realising their income from interest.
❖ This type of funds generally has lower volatility than stocks and has the
potential to offer higher gain than the money market funds.
❖ Their main source of return is in the form of income payment.

6. TYPES OF UNIT TRUST
Money Market Funds
❖ Money Market funds hold very short term money market instruments at
the lowest risk.
❖ This type of fund often tends to keep their NAV constant.
❖ They invest in low risk and high quality debt securities.

7. TYPES OF UNIT TRUST
Islamic Unit Trusts
❖ Islamic unit trust funds are getting more important lately.
❖ It provides an avenue for investment for those investors who are sensitive to
Shariah compliance.
❖ Islamic funds arise from the Shariah restriction on investment. Islamic funds have
a confined pool of stocks to invest in because the investment of Islamic funds is
regulated by both the capital market regulation and the Shariah principle while the
conventional fund is only governed by the capital market regulation.

8. 3.Unit trust process flow/ procedure in Malaysia
TRUSTEE TRUSTEE
DEED
MANAGER PROSPECTUS
Custody and
safeguard the
interest of unit
holders
Administer the
operation of the
unit trust scheme
Executes Executes Issue
UNIT HOLDERS

9. Manulife Global Aqua Fund
BIMB Arabesque Global Shariah Sustainable Equity Fund
Manulife Global Aqua Fund is an open-end fund incorporated in Malaysia. It aims to provide capital
appreciation by investing in one collective investment scheme with investment focus on companies
tackling the challenges and helping to accelerate the transition to a more sustainable world.
BIMB Investment Management Berhad (“BIMB Investment”) is a leading Shariah-ESG
investment management company in Malaysia. A wholly owned subsidiary of Bank Islam
Malaysia Berhad, BIMB Investment is a licensed Islamic fund management company registered
with Securities Commission Malaysia.
4 example unit trust company in Malaysia

10. RHB European Select Fund
The Fund aims to achieve capital growth over the long-term
by investing in one target fund, i.e. the Threadneedle
European Select Fund.
Principal Islamic Enhanced Opportunities
Principal Islamic Enhanced Opportunities Fund is a Shariah-compliant equity fund issued by
Principal Malaysia. The Fund aims to earn reasonable returns for investors by investing in
approved equities* listed on Bursa Malaysia as well as unlisted securities and other non-
interest bearing assets acceptable under Shariah principles.

11. 5. Advantages and Disadvantages of Investing in A Unit
Trust
Advantages 5
2
6
1
4
3
You have experts doing the
hard work for you.
There are many unit trusts to
choose from
For many unit trusts, you can
set up a regular savings
programme and have your
savings drip-fed
You get the benefits of greater
economies of scale, such as
reduced transaction costs
Our resources are pooled with
other investors, allowing you
to make investments
impossible as an individual
investor.
•It helps you to easily diversify
your investments.

12. 5. Advantages and Disadvantages of Investing in A Unit
Trust
Disadvantages 2
1
There are costs over and
above those you'd pay if you
were investing directly
Unit trusts may not be as
liquid as some other
investments.