A Unit Trust, or Mutual Fund, is a professionally managed form of collective investment that pools money from many investors and invests it in stocks, bonds, short-term money market instruments and other securities. This allows individual investors to invest in a range of assets and earn potential returns through capital gain or payouts.
The Fund Manager, also known as the Portfolio Manager, trades the fund’s underlying securities, realizing capital gains or losses, and collects the dividend or interest income. Investment proceeds are then passed along to the individual investors. The value of a share of the unit trust, known as the net asset value per share (NAV), is calculated daily based on the total value of the fund divided by the number of shares currently issued and outstanding.
