Unit trusts – the buffets of investments

Buffets are popular in Singapore, a nation of many foodies. Do you also fancy a delightful spread, even for investments? If so, you may wish to consider investing in unit trusts (UTs). Here are five reasons why UTs are like buffets.

1. THEY COME WITH A GOOD SPREAD

When it comes to investing, diversification is always a good way to balance risk and reward in your portfolio. Unit trusts are exactly that, offering a varied selection of investments so you don’t need to pick them individually.

2. YOU CAN CHOOSE ONE TO SUIT YOUR TASTE (RISK APPETITE)

Unit trusts let you invest across a wide range of markets, industries and sectors. They also come with varying risks and rewards so you can always find something to suit your appetite:

Fixed Income Funds: Funds that invest in bonds and pay out a fixed amount on a fixed schedule

Equity Funds: Mutual funds that invest primarily in stocks

Balanced Funds: A mix of bonds, equities and commodities

3. IT’S PUT TOGETHER BY A PROFESSIONAL

A fund manager takes care of your unit trust investments – watching the market, selecting investments and adjusting the mix continuously. With access to investment information and research, he can decide on the fund’s strategy and make sharp long-term decisions to manage the funds.

4. YOU GET VARIETY AT AFFORDABLE PRICES

Buffets offer a huge variety at a price significantly lower than if you had ordered all the items à la carte. Similarly, unit trusts enable you to invest in a suite of assets that can include blue-chip stocks at an affordable price, starting from as little as a one-time contribution of S$1,000 or regular monthly contributions of S$100 per month.

5. CASH OUT WHEN YOU’VE HAD YOUR FILL

It’s entirely up to you. Most unit trusts are not locked in for a definite period and can be sold and converted into cash at any time. So, invest as much as you are comfortable with, using a time frame that suits you.

GETTING YOUR FIRST BITE WITH A TWO-PRONG APPROACH

1. Give yourself a head start
   Jump the (buffet) queue and start investing in unit trusts with a lump sum from your bonus or savings.
2. Grow it steadily
   Keep the momentum you’ve got going, by adding to the pot with regular monthly contributions.

Interested to learn more before you start?

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