Generally, we have a few Asset classes:
a. fixed income
b. mixed-assets / balanced
Notably, each of the asset classes will have its very own sub-classes, such as geographic, shariah compliance, or category. As example, Equity fund (Growth, Malaysia Only), Bond Fund (Income, Asia Pacific Ex Japan), or Balanced Fund (Income, World) etc. Apparently, each of the naming of the fund will kind of offer some idea what does the fund do or its objective are. For instance, a growth fund will have its mandate to invest and constantly explore for growth opportunity (capital appreciation), while an income fund will have its mandate to invest for consistent income.
Therefore, you may have noticed that if we were to invest in all funds, we will likely have to work with 36 Unit Trust agent, multiple Institution Unit Trust Advisor such as Bank. The good news is, there is an alternative access to a personalised unit trust portfolio via Corporate Unit Trust Advisor (CUTA) that many of us still unheard of. CUTA is the channel whereby investor can get to work with a Licensed Financial Planner and at the same time gain access to multiple types of funds and has the ability to select different funds from different fund houses and construct a portfolio that resemble and fit into the need and objective of investor. Similarly, you may also opt for the DIY approach via online platform such as Fund Super Mart or eUnitTrust to have access to multiple funds from multiple providers but the down side is that you will need to know how to select and manage the portfolio on your own.
When we do investment planning, it is important for us to understand how to filter from the wide universe of funds available to the few funds that suitable to our very own risk profile, objective and time frame etc. Therefore, working with Unit Trust Consultant or IUTA may not offer this as these traditional distribution channel will be limited to making recommendations based on the funds available from the SINGLE fund House they are licensed to represent. Licensed financial planner will be able to filter and handpick the best of breed funds from the same category and integrate it into your account for you, hence making more efficient work for your money and able to minimise and manage risk at the same time.
Unfortunately, it is not possible for One Unit Trust Consultant or Banker to help you do this filtering and hand-picking as they will be limited by the number of choices available in their ‘Menu’, but for a Licensed Financial Planner, the ‘Menu’ is the whole universe.
Apart from this, it is also imperative that before you go into investing in Unit trust, or any form of investment, you have done the basic fundamentals right.
1. Emergency Cash Reserve (This will ensure you have holding power to withstand market volatility)
2. Understanding your risk profiles and risks appetite
3. Asset allocation (For instance, 20% Fixed Income, 80% Equity)
4. Filtering and Fund Selection (You must know what parameter to track and to be used for filtration)
5. Monitoring and Portfolio Rebalancing (Recommended rebalancing at least once a year)