More financial institutions and unit trust management companies are expected to
launch new funds in 1997 in order to capitalize on the market boom. More new players
are likely to participate with the existing ones looking for further improvements
in fund performance and introduction of innovative products such as closed-end funds.
Performance and service are likely to be the two main factors influencing investors'
All in all, the unit trust industry in Malaysia is likely to undergo an exciting
growth period in 1997.
Having outlined many positive views on the unit trusts in 1997, what can an investor
like you expect? In 1996, many unit trusts have managed to perform well. There were
some funds that achieved an excess of 30% returns while there were others which underperformed
If you are an existing player, you have three choices. Depending on the performance
of your fund(s), you can increase your exposure, stay steady with the current investment
or stay out partially or completely.
You should find out what went wrong if the fund(s) that you invested did not live
up to your expectations in 1996 which was generally a good year for the local stockmarket.
Remember that there are other funds that have been performing well. At the very least,
you should switch to other funds particularly if the funds that you have invested
consistently unperformed the market on a longer time frame. And if you are considering
to diversify into more than one fund, then it is essential that you keep your options
If you are a new comer to the unit trust territory, you should do more homework before
making the ultimate investment decision. If you want to make informed investment
decisions, you should attentively evaluate the performance of all the fund managers
plus the different types of funds available. Professional investment advisor can
relieve you of some of the difficult tasks.
It is always wiser to analyze the performance of unit trusts on a longer term basis.
What is the probability of a unit trust which achieved 40% return in 1996 will be
repeated this year? The answer is likely to be low.
In conclusion, with a menu of more than 70 funds to choose from, you should be careful
in selecting a unit trust that matches your personal investment goal. It is today's
investments selections that determine the fate on your money that you invest.