How risky are Unit Trusts?
Fund Managers of Unit Trusts usually invests in many different stocks or bonds, across many different sectors. They do this in order to spread the risks (what is known as diversification). For example, a Singapore unit trust might hold stocks of banks, property companies and manufacturing companies. Any negative developments affecting any one sector is thus limited to only a portion of the unit trust. There might be positive developments in the other sectors which may cancel out the negative effects of the first sector. In this way, diversification minimizes the impact of negative developments and lowers the risks of investment. Return to Top For further assistance, call our helpline at 6557 2853 from 8am to 7pm on Mondays to Fridays, and from 9am to 1pm on Saturdays (excluding public holidays).
