Top of main content
Stacked coins sprouting green shoots, like money growing; image used for HSBC Jump into the world of trust units article page.

Jump into the world of unit trusts

Unit trusts are popular because they're managed by experts and they offer diversification. Learn a bit more about how they can grow your wealth.

What are unit trusts?

A unit trust is a form of investment fund. A pool of money collected from investors worldwide is managed by a fund manager, who will use it to invest in different assets for steady and long-term growth. Each unit trust has a specific focus. This can be a geographical location or a business sector. Fund managers will then pick suitable assets and regularly review the performance.

Depending on the unit trust's objective, some managers will pick riskier assets for better return potential, while others may opt for something safer. Since you're investing in multiple assets at once as small fractions, you won't feel as much impact if one of the investments does poorly, compared to investing in just one asset.
 

Unit trusts have several advantages, including:

  • Professional management by experts who are dedicated to the pool's growth
  • Access to global opportunities otherwise unavailable for individual investors
  • Risk diversification as the fund comprises multiple assets


But there are a few considerations:

  • Funds have annual management fees
  • They're medium- to long-term investments, and might not be suitable for short-term investors
  • Like all other investments, there will be risks involved when you invest in unit trusts

Understand more about Unit Trust

What types of unit trusts can you find?

Here are a few of the most common types of unit trust funds:

 

Equity funds

This type involves investing in company stocks. Fund managers will seek out companies from different locations and sectors, such as technology, property and finance.

 

Bond funds

This type invests in a portfolio of bonds from a specific geographical location or sector. It generally has lower risks, provides income to investors but gives lower potential returns compared to equity funds.

 

Balanced or multi-asset funds

A combination of different asset types, such as equities, bonds and cash, this is good if you are looking for extra diversification in your portfolio.

 

Income funds

The income funds focus on providing regular income or dividends to investors and such approach can be found in equity, bond, balanced or multi-asset funds. If you're looking for a regular source of extra income, income funds are the way to go.

 

Money market funds

This type involves investing in cash equivalent instruments, such as treasury bills or bank promissory notes.

 

Others

There are many other kinds of funds available, such as property funds, technology funds and single-country funds.

Now, where to find them?

When choosing your unit trust, remember to complete our risk profile questionnaire to understand your risk appetite. Then, look for a suitable unit trust based on your risk level.

Want to get started? Go to Fund Express to find suitable unit trusts. With Fund Express, you can sort unit trusts by category and fund house. To have a better idea on each fund, view the graphs and data indicating their performances in the past years.

Want to go straight to the trailblazers? Select the 'Top Performers' tabs to find the information you need. You can even view and compare funds across multiple sectors. If you see a sector you fancy, simply select it and choose from the list provided, or even compare individual unit trusts' performance so you can make an informed decision.
 

You can view the following information on an individual unit trust:

  • Performance over the years
  • Yearly returns and key fund statistics
  • Charts showing the fund allocation by location and sector
  • Dividend information
  • Fund size and quality rating
  • Brochures and fund documents
     

As you make the move to invest, you can either pay a lump sum, or opt for a monthly payment through our monthly investment plans.

Contact us if you still have questions. Our wealth managers are happy to help.

Related articles

Person researching investment products on mobile phone and laptop; image used for HSBC Singapore 5 reasons to do your own investing.
 

Handling your own investments is easier than you think.

A Woman is using laptop; image used for HSBC Singapore You don't need a fortune to start investing.
 

It's not just for the rich. See how you can begin your journey today.

 Business man signs contract behind a house of architectural model; image used for HSBC Singapore saving vs investing page.
 

To invest or not to invest? Let us help you with that.

Climber on snowy mountain ridge; image used for HSBC Singapore article Practical tips for successful investing.
 

Diversify to reduce risk and open up to more return opportunities.