Getting Started?

There are four major ways to start investing in unit trusts:

Lump Sum Purchases
This is where an investor has a lump sum to invest into a unit trust. This may be the only investment the investor wishes to make. Over a period of time (3-20 years), the initial investment will increase as distribution and other income is earned by the fund. When redemption or sale of the units take place, the unit-selling price will reflect the accumulation and compounding of capital over the relevant periods. It is this compounding effect over time which makes accumulation type investments, such as unit trusts, so attractive to the investor.

For example, someone who has recently inherited a sum of money may wish to invest the funds into a unit trust and hold it for an extended period to save for some specific purpose. e.g. children's education. At the end of the holding period, the proceeds of the sale of the units will be the initial investment plus the returns on that amount, accumulated over the period.

Regular Savings
Some people invest in unit trusts by making regular (e.g. monthly) contributions to their fund. This is an ideal, disciplined and useful way to accumulate capital for a future need. By making regular contributions over a period of time, the sum accumulated at the end of the period will increase. This is commonly known as dollar cost averaging.
At the end of the period, the redemption (or sale) price of the units held will represent the accumulation of all contributions, plus returns generated from the total contributions since the first purchase was made. The effect is more noticeable the longer the holding and contribution period. This form of savings is the basis of most pension fund accumulation e.g. the Employees Provident Fund.

EPF Transfers
Investors may also invest in unit trust funds through transfers of eligible amounts from his EPF account 1. EPF members who have savings of at least RM6,000.00 (Based on 18 Years old) in account 1, are eligible to withdraw RM1,000.00 from their EPF savings to invest in unit trusts.

Note: Amount of investment may vary, depends on basic savings in EPF account 1 over age of investor.

Simple Calculation
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= Amount in EPF account 1 - basic savings = Balance x 20% = Amount to invest in unit trusts
Roughly... a Minimum of RM1,000.00 can be invest from

..Age 20, EPF Account 1: RM8,000.00
..Age 25, EPF Account 1: RM14,000.00
..Age 30, EPF Account 1: RM23,000.00
..Age 35, EPF Account 1: RM34,000.00
..Age 40, EPF Account 1: RM49,000.00
..Age 45, EPF Account 1: RM69,000.00
..Age 50, EPF Account 1: RM95,000.00
..Age 55, EPF Account 1: RM125,000.00


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Borrowing
Although an investor may obtain a loan from a financial institution for the purpose of investing in unit trust funds, investors should seek appropriate advice as there are additional risks involved when using borrowings to finance an investment in unit trust funds.