Malaysia Unit Trust Overview: Funds, Roles & Types

Malaysia Unit Trust Overview: Funds, Roles & Types

Malaysia Unit Trust Overview

Introduction

A Malaysia Unit Trust Overview helps investors understand how collective investment funds operate. In Malaysia, unit trusts allow individuals to pool money into diversified portfolios managed by professionals. This guide explains their structure, stakeholders, and types.

What is a Unit Trust?

A unit trust is a collective investment scheme where funds from multiple investors are pooled into a portfolio of financial assets.

Key Features

  • Collective Investment: Pools money from investors into stocks, bonds, property, or other assets.
  • Trust Structure: Involves three main parties – investors, trustees, and management company.
  • Not a Separate Entity: Operates through a trust deed, not as an independent legal entity.

Types of Unit Trust Funds

1. Conventional Unit Trust Funds

These invest across various financial instruments without specific restrictions.

2. Islamic / Shariah-Compliant Unit Trust Funds

These funds follow Islamic principles, avoiding non-Shariah securities such as alcohol, gambling, or interest-based investments.

 

Key Stakeholders in a Unit Trust

Party Roles / Responsibilities
Management Company

(Fund Manager)

• Establishes the unit trust through a trust deed

• Manages the investment portfolio

• Handles marketing and administration

• Determines the daily unit pricing

Trustee(s) • Ensures compliance with the trust deed

• Safeguards unit trust assets

• Acts as custodian and legal owner of assets

• Protects the interest of unit holders

Investors

(Unit Holders)

• Buy and redeem units at the current unit price

• Share in profits/losses based on units held

Key Takeaways

  • Unit trusts pool money for diversified investment.
  • Three stakeholders: fund manager, trustee, investors.
  • Available in conventional and Shariah-compliant forms.
  • Regulated under the Malaysian Capital Markets and Services Act 2007.

 


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