How To Read Your Unit Trust Performance

So you have invested in Unit Trust fund for a few years now. Every time your unit trust consultant approaches you to invest, you gladly provide him or her with the necessary details and transaction. How do you check the performance of the fund you invested into?  

The main reason why you should know the performance of your investment is so that you can make rational decision on whether to keep on investing into the same fund or switching to another fund. Your small decision may make a big difference by the time you realise your profit 10 or 20 years later.

Here are some quick steps for you to monitor your investment.

Know the Fund Name

The first thing that you should know is the name of the Fund and investment company you are investing into. Many times we have met clients whose answer to the question of “Which fund did you invest into?”, is “I don’t know. I just give the money to my consultant to do everything.”

Search for 'Bloomberg' in App Store or Play Store

Download the Free Bloomberg App

Next, you will need to download the free app ‘Bloomberg’ which is available both in Google Play Store and Apple App Store. There are a few variety of similar name apps, but choose the one with the right app icon. This app can be used for the simplest function of finding out the up-to-date performance of the fund. All you need to do is to search for the name (or partial name) of the fund in the Search Bar and select the correct name to display the details of the fund.

Search for the fund name in the search bar 

Current Year Return

One of the details show ‘YTD Rtn’, which stands for ‘Year To Date Return’. It will show the total return from 1^st of January of the current year until the most recent update. With this, you will be able to gauge the short term performance of the fund.

Annualised Return

In simple terms, ‘annualised returns’ means average return for the past years. So, if annualised return for 3 or 5 years, means the average compounded return if your started your investment 3 or 5 years ago. The report will not be able to show the report if the fund  is less than 3 or 5 years old.

Misconception About Income Distribution

The older generations of investor view income distribution very highly. They are actually comparing this to getting dividend profits from share investments. One of the crucial difference between Unit Trust and Share investment itself is that the income distribution of the unit trust fund is re-invested by distributing more units to the investor. Investor can opt to have it withdrawn like dividend payout, but this will stop the compounding interest effect.

In short, you do not need to worry if your fund did not declare a high income distribution or any distribution at all. So long as the unit price is high, you are still profiting.

More Units + Higher Unit Price = Higher Returns

Now that you know how to read the chart and find out the fund actual performance, you can now refer back to the number of units you have for the fund. You can usually find out the amount from your investment portal, or from the statements provided to you. With all these information on hand, discuss with your investment consultant based on the market condition. You can make a decision on whether you need to restructure your portfolio by switching to another fund (if you are not satisfied with the fund’s performance), top up investment or stay the course (if you are happy with the fund’s performance).

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