A unit trust is a type of investment company that lets people pool their money with other investors. As a group, you get the benefit of having one manager (broker) to watch over a diversified group of stocks, bonds and other investments. The manager gets paid by charging a percentage of the money managed, whether or not it makes profit.
A professional manages your money, so you don’t have to worry as much about the day-to-day investment decisions. It can be nice to let someone else do the work, but it is still important for you to be educated about your investments, so don’t rely 100% on this kind of fund.
1. Low starting cost. You don’t need as much money to get started.
2. Ease. A professional investor manages your money.
3. Convenience. You can buy them by mail, phone, Internet or through a professional broker.
4. Diversification. Your money is split between funds, helpful for managing risk.