Unit Trust

Unit trust or mutual funds as they are known in America are a pretty good investment vechile for the majority of us who are usually to busy with their daily lives to manage their investment portfolio. A unit trust has higher returns than a bank account or a fixed deposit but has less risk than investing in the markets yourself. However, each unit trust is different. Some invest in high yield-high risk products. The 35% return you mentioned sounds like one of those. Others have various degress of risk and return. So you need to check your risk appetite before investing. Not all of us can afford to put money into a high risk product. You need to be comfortable with what you are investing in. Like other investment products, you need to know what you are getting into. You need to be aware of things like the charges. Some unit trust have higher charges - so $1000 of one unit trust may not be $1000 worth of units - it may be $998 or $989 worth of units. This is because of charges (where the funds make money to cover the cost of managing your money.) Thanks to charges, you need to be able to keep your money in unit trust for sometime. I think the average is about 3-years before the funds start to make money for you. You must also never forget the idea of what goes up can do down. The price of your units may not always be on the winning side. Don't panic! Its been shown that over a period of time, unit trust do make money for their owners. However, you have to give your unit trust a reasonable ammount of time to produce the expected yields. A unit trust is not something you can withdraw from the next day.