I believe we all know that saving cannot make a person rich, only investing money can make a person reach the goal of being rich.
Trust funds have become an investment target for many people because they only require the funds to be invested by experienced people. The investor does not need to spend much time to operate the transactions and track the investment situation.
Have you carefully understood the information of the fund before buying a trust fund? Here are 7 things you need to know before buying a trust fund.
1. Investment Areas
Before buying a fund, it is important to know what the fund invests in, such as a money fund, a stock fund or a bond fund. Each fund will clearly state the allocation of funds, for example, 75% to 90% of the funds will be invested in equities and up to 25% in fixed assets.
Not only that, but the investor also needs to know in which country the fund is invested, e.g. 70% in Malaysia and 30% in China and Korea and so on. This will give the investor a general idea of the risk of the fund.
2. Dividend payout ratio
You can find out the dividend payout ratio of the fund for the past 5 years, but it is important to note that the past dividend payout ratio does not mean that the same dividend payout ratio will be earned in the future. But at least you can get a general idea of the fund’s direction. If the payout ratio in previous years does not meet your target, think twice before buying the fund.
3. Price per unit
The price per unit of a trust fund will fluctuate with the market and will vary from day to day, so the purchase price is very important. Generally, the price of a trust fund is likely to be higher before the announcement of a dividend, so you should choose the time to buy carefully.
4. Sales Fee
Every trust fund imposes a sales charge, for example 5%. This 5% is calculated by multiplying the amount you buy by 5%. In short, every trust fund needs to pay a sales fee when you start investing, so you will lose money before you start earning.
5. Management fees and trust fees
Every trust fund imposes a management fee, for example, a management fee of about 1.50% of the net asset value. In addition to the management fee, you will also have to pay a trust fee of, for example, 0.06% of NAV. These fees are deducted when the fund announces its returns before the remaining returns are distributed to investors.
6. Payout Date
Before buying a trust fund, it is also important to know the fund’s fiscal year and dividend payout date, which is December 31 for some funds, March 31 for others and June 30 for others. The payout date will be different for each fund.
7. Others
Other things to know include the starting capital, minimum additional investment amount, etc.
