When I was working in corporate companies, I was approached by a few unit trust consultants. I did invested by using my EPF savings after being convinced on the potential returns. As I was not really understand how unit trust works, I gave 100% trust to the consultants to choose the funds for me. Unfortunately, not all their promises were well delivered.

Yes, I learnt from my lesson and decided to share these 3 simple tips on what to check prior investing on the funds.

  1. Performance or track record of the fund will give you an indication on fund manager’s ability to manage risk through any market fluctuation. Don’t simply look based on the overall performance from the fund’s inception/launched. The fund’s performance might change from time to time. What was good last 15 years might not be great now. Just look at Blackberry.

I would recommend the investor to look at the annualize return of the fund for the past 5 years as below example. This will give an idea how the fund performs recently.

2. Dividend yield. A good fund will give dividend at yield 5 -7% annually. Hence, although the price of the fund fluctuates in certain year, the dividend’s received will increase the total unit accumulation. 

3. If you is being approached by unit trust consultants, ask them to show their own investment. As currently every consultant can access company’s system via laptop, iPad & handphone, then there is no reason why your request cannot be fulfilled. If the consultant is able to do it, means that the consultant has 3 important traits;

a. he/she believes in the product

b. he/she practices what being said and not just selling

c. he/she has full visibility of the fund’s performance and understands what’s is expected from investor.

Wish you Happy Investing !!


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