Sunday, October 29, 2006

What's the difference between unit trust and mutual fund?

What? I thought they're the same? Technically they're the not the same but you can say that they're similar. Nowadays, it seems like both terms are confusing and interchangeable. To make thing simple and let’s kill all the confusion, mutual fund is the American term for unit trust. Mutual fund is found in US and unit trust is found in UK. They’re very similar and you’re safe to assume they’re the same.

Why do you still border to know their differences since they are both are investment scheme that serve the same purpose? In terms of their structure, they are the same too. Both of them have the fund manager, trustee and unit holders just like the unit trust. So, let’s ignore it. No difference. They’re the same.

Most importantly what you really need to understand is the types of unit trust and different categories of unit trust. Finally, choose what types of unit trust fund that meet your desired objective.


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