More unit trusts for sale
Local investors now have more unit trusts to choose from because of the substantial increase in the number of trusts over the past few years.
Figures from the Association of Collective Investments (ACI) show that no less than 265 new unit trusts have been launched in the past three years.
Considering that there are now a staggering 633 unit trusts registered, this means that more than 42percent of them have a track record that has never been tested in a bear market.
So what has been the leap forward in the unit trust sector, and how do we select one category from the other?
The Alphen Angle, a publication of Alphen Asset Management, a subsidiary of PSG Fund Management, divides unit trusts into three primary categories: equities, asset allocation and fixed interest.
According to ACI, 120 unit trusts were launched last year and 70 fell under the asset allocation (including real estate) category, 27 were equity trusts and 23 were fixed income (including money market).
Compared with the number of funds three years ago, this shows an increase of 23percent in equity funds, 47percent in fixed-interest funds and a massive 152percent increase in asset allocation funds.
According to PSG Fund Management, general equity funds make up 51percent of all domestic equity funds.
The next-largest category of funds, investing in large-capitalisation companies, has only 58 funds, a mere 9percent of the total.
PSG believes that asset allocation funds have clearly been the growth area over the past three years.
"Looking at the underlying components, the number of funds in the prudential medium-equity and prudential high-equity sectors have increased by 66percent and 64percent respectively," write PSG's fund managers in The Alphen Angle.