Unit trusts enable investors to invest in a wide range of shares, bonds and other assets using relatively small amounts of money. Fund Manager use the pool of money to buy the underlying assets – shares, property, bonds, cash or a combination of these – on local or foreign markets, depending on the type of unit trust.
Each fund is split into equal portions called units. The price of these units, also called the net asset value (NAV), depends on the value of the underlying assets. Units are priced daily because the value of the underlying assets changes on a daily basis.
When an investor invests in a unit trust, units are allocated according to the amount of money invested and the price of the units on the day they are bought.