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Actively managed unit trusts are good investment options if you are unable to monitor individual stock performance and want to diversify your investments in professionally managed portfolios of stocks, bonds and other assets.
Diversification enhances a portfolio return potential over the long run, by allowing participation in certain investments that can be risky on a standalone basis
84% of Standard Chartered’s Fund Select funds have generated positive absolute returns for our clients, and 74% of these funds were placed in the top 2 quartiles in their respective peer groups.
Improve your odds with actively managed unit trust
Many investors hope to invest in the next performing stock which can give them good returns. However, making that dream a reality takes plenty of time, effort and certain level of knowledge to evaluate price-to-earnings (P/E) ratios, revenue, net income, management team and more. For those who find such research a challenge, unit trusts are good investment options to consider.
A mutual fund is professionally managed by a fund manager and his team to achieve returns (capital gains or regular income) based on its investment objectives. It comprises of a diversified portfolio of stocks, bonds and/or other assets. Different type of funds can provide diversification across asset classes, sectors, and geographical regions.
Diversification is a good investment strategy to adopt as it allocates your wealth across different asset classes to help manage and reduce risk in your overall portfolio. Since each asset class behaves differently under various economic conditions, in a well-diversified portfolio, the performance of any single investment should not have a disproportionate impact on the overall portfolio. Furthermore, diversification help enhance a portfolio return potential over the long run, by allowing investors to participate in certain investments that can be risky on a standalone basis.
Keep in mind that unit trusts do charge annual fees that can range from 0.5% to 1.5% of your total investment.
Access diverse fund types catered to your investment goals and preferences
In the universe of mutual funds, there are several categories of mutual funds you can invest in:
Equity funds: focus on stocks and can be compiled by market cap size, investment approach or the national origin of the equities.
Fixed-income funds: focus on investments that pay a fixed rate of return like government or corporate bonds.
Multi-Asset funds: focuses on a mix of asset classes including stocks, bonds, alternative investments and more, with fixed or dynamic allocation strategies to meet investor objectives.
Money market funds: focus on short-term debt instruments like government treasury bills that are safe, stable and provide liquidity.
Sector/Thematic funds: focus on specific industries or sectors such as Water, Technology, Healthcare, Financials and more.
For investors who are just starting out their investment journey, it may be a challenge and costly to identify the right mix of assets to construct a properly diversified portfolio. An investor may need to buy more than 20 individual investments which requires large financial commitment and transaction costs. Therefore, a more efficient option for investment diversification may be for investors to first start off with a diversified multi-asset fund that can offer exposure across assets.
Not all funds are made equal
With so many unit trusts available in the market today, it can be a challenge finding the right ones. Standard Chartered’s Fund Select helps to narrow down highquality funds for your investment needs – for regular income or capital growth or simply to participate in a specific sector or theme.
Established since June 2009, Fund Select started as a proprietary fund selection process driven by Standard Chartered’s Chief Investment Office (CIO) views to discover mutual funds and ETFs that outperformed their peers and benchmarks. This selection process has been refined over more than a decade to give investors access to funds with the greatest potential to add value to their portfolios. In fact, as of end Dec 2021, 84% of our Fund Select funds have generated positive absolute returns for our clients, and 74% of these funds were placed in the top 2 quartiles in their respective peer groups.
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Disclaimer
This article is for general information only and it does not constitute an offer, recommendation or solicitation of an offer to enter into any transaction or adopt any hedging, trading or investment strategy, in relation to any securities or other financial instruments. This article has not been prepared for any particular person or class of persons and does not constitute and should not be construed as investment advice or an investment recommendation. It has been prepared without regard to the specific investment objectives, financial situation or particular needs of any person or class of persons. You should seek advice from a licensed or an exempt financial adviser on the suitability of a product for you, taking into account these factors before making a commitment to purchase any product or invest in an investment. In the event that you choose not to seek advice from a licensed or an exempt financial adviser, you should carefully consider whether the product or service described herein is suitable for you.
You are fully responsible for your investment decision, including whether the investment is suitable for you. The products/services involved are not principal-protected and you may lose all or part of your original investment amount.
Standard Chartered Bank (Singapore) Limited will not accept any responsibility or liability of any kind, with respect to the accuracy or completeness of information in this article.
Deposit Insurance Scheme
Singapore dollar deposits of non-bank depositors are insured by the Singapore Deposit Insurance Corporation, for up to S$100,000 in aggregate per depositor per Scheme member by law. For clarity, these investment products are not deposits and do not qualify as an insured deposit under the Singapore Deposit Insurance and Policy Owners’ Protection Schemes Act 2011. Foreign currency deposits, dual currency investments, structured deposits and other investment products are not insured.
The information stated in this article is accurate as at the date of publication.
