Units trust are a kind of a collective investment that allows investors with similar investment objectives to pool their funds to be a portfolio of securities or other asset.
3.2 The party who involve in a unit trust
The party who involve in the unit trust is the FIMM(Federation of Investment Manager Malaysia), Unit Trust Company, fund manager, bank, unit trust consultant, and unit holder or unit trust investor.
Fund Manager
All the unit trust is control, monitor and manage by a fund manager. A professional fund manager will manage their fund invest into a portfolio like money market instrument, capital market instrument and asset. The portfolio of unit trust may include the asset of the cash, bonds, and deposit in bank, T-bill, shares, properties, commodities, gold and many more. Fund manager will determine the sizes of the fund. Fund manager also will decide which area their need to invest and manage the risk of the fund. If the fund manager is managing the fund well and the fund is earning profit. They will get the benefit from the profit. The company may take a few percent of the profit as their monetary reward to the fund manager.
Unit trust company
They are many unit trust companies in Malaysia. The unit trust company need to register them self to the FIMM (Federation of Investment Manager Malaysia).after the FIMM approve the registration the unit trust company have the authorized to issue or offer for purchase of unit trust scheme. The unit trust company will hire the fund manager to work with the company. All the unit trust companies are control by the sub section 2(1) of the capital markets and service Act 2007. (www.fmutm.com.my)
Unit trust holder or investor
The unit trust holder does not own the securities of unit trust in the portfolio directly. Ownership of the fund is divided into units of entitlement. As the fund increase or decrease in value, the value of each unit will also increase or decrease accordingly. The number of units hold by the invester depends on the price of the unit trust fund and the amount of money invested. The return on investment of unit holders is usually in the form of income distribution and capital appreciation. Each unit earns an equal return, determined by the level of distribution or capital appreciation in any one period. Unit trust investors are typically those with savings to invest (household) or by company or social group (KWSP â€" Kumpulan Wang Simpanan Perkerja). The investors of unit trust prefer to invest in a secure, reputable investment vehicle which suits their purposes. Unit trusts allow investors to have easy access to a wide range of investments not normally available to them. As investors seek to maximise returns on their financial resources, unit trusts provide an ideal way for them to gain exposure to investments. In the long run, should produce returns superior to cash savings and fixed deposit investments but the risk will be higher than the saving and deposit investment.
Banker
Bank is the place who the fund manager to deposit their money who collected from the investor. Banks also need to monitor how the fund manager using the money collected. Banker also needs to make sure the fund manager did not miss use of the money because the amount involve is very big, some time it will involve million of Ringgit Malaysia. Usually before the fund managers make an investment they need to do a report summit to the company to approve. After the company approve it will issue a letter to the bank. When the banks receive the approver letter, the banks will release the money for the fund manager to invest.
Federation of Investment Manager Malaysia (FIMM)
Federation of investment manager Malaysia is a group that control of the investment company and the fund manager. All the unit trust management company need to apply ordinary membership from the FIMM. The rules and regulations covering membership are stipulated in the FIMM's Memorandum and Articles of Association. All membership applications are subject to the FIMM Board of Directors' approval. Before acceptance as a member, a copy of the FIMM's Memorandum and Articles of Association will be extended to the respective corporation or organisation. (www.fmutm.com.my)
Unit trust consultant
Unit trust consultant means an individual who is duly registered with the Federation of Investment Managers Malaysia to market and distribute unit trust funds. (www.fmutm.com.my). the requirement to be unit trust consultants is
Member must be 21 year old and above.
Must possess the minimum qualification of Grade 3 Sijil Pelajaran Malaysia (SPM), or its equivalent, as determined by FIMM
Must be honest, of good character and good repute. In addition, the person must also display efficiency, reliability and a high level of integrity. In this regard, the person must not have been :
found by a court or other competent authority to have acted fraudulently or dishonestly
convicted of a criminal offence
censured or reprimanded by, or denied or disqualified from membership of a professional or trade body; or a regulatory licence, registration or similar approval has been refused or revoked
The person must sign a statutory declaration attesting to the above attributes and must not be in breach of the signed statutory declaration at all times
Upon satisfying the requirements, the person must pass the Computerised Unit Trust Examination (CUTE) before being authorised to market and distribute unit trusts. A person who does not satisfy the basic requirements will not be registered to sit for the CUTE
Above is the rule and regulation to be a unit trust consultant. The responsible of a unit trust consultant is to explain and interpret the portfolio of the unit trust and the risk of invest in unit trust to the customer. The unit trust consultant will earn some profit from the money that the customer invests.
3.3 History of unit trust worldwide and Malaysia
The first company introducing the unit trust in Malayan Unit Trust Ltd in 1959. At that time Asian neighbours like Indonesia, Singapore and Thailand all haven started introducing unit trust. So, Malaysia introduced the unit trust concept earlier than its Asian neighbours. The changer of the unit trust can category as four part.
The formative years: 1951 â€" 1979
In this period the unit trust company are facing the problem of slowly growing of the sales and lake of public interest in the new investment product. At that time only have five unit trust management companies in the market and just only have 18 type of unit trust are selling in the market. The industry was regulated by several parties including the Registrar of Companies, The Public Trustee of Malaysia, Bank Negara Malaysia and the Ministry of Domestic Trade and Consumer Affairs. In the 1970s witnessed the emergence of state government sponsored unit trusts, in response to the Federal Government's call to mobilise domestic household savings.
The period from 1980 to 1990
In this period, government start to participate in the unit trust industry area. Government start to form a committee to regulate the unit trust industry. The name of the committee is Registrar Of Companies (ROC), Public Trustee of Malaysia, Bank Negara Malaysia (BNM), and the Capital Issues Committee (CIC). 1980s year was a important year for the industry because the Amanah Saham National (ASN) was launched by Permodalan National Berhad(PNB)in year 1981. During this period the market just has 11 type of fund. The total units subscribed by the public swelled to an unprecedented level because of the overwhelming response to ASN. The 1980s also witnessed the emergence of more unit trust management companies, which were subsidiaries of financial institutions. Their participation facilitated the marketing and distribution of unit trusts through bank's branch network which widened investor reach.
The period from year 1991-1999
In this period, the unit trust industry is growing fast in term of the number of the new management companies established and the funds under management.
3.4 List of company that registers to FIMM
1) AFFIN FUND MANAGEMENT BERHAD
2) ALLIANCE INVESTMENT MANAGEMENT BERHAD
3) AMANAH MUTUAL BERHAD
4) AMANAH SAHAM KEDAH BERHAD
5) AMANAH SAHAM NATIONAL BERHAD
6) AMANAH SAHAM SARAWAK BERHAD
7) AMANAHRAYA INVESTMENT MANAGEMENT HDN BHD
8) AMINVESTMENT SERVICES BERHAD
9) APEX INVESTMENT BERHAD
10) ARECA CAPITAL SDN BHD
11) ASM INVESTMENTSERVICE BERHAD
12) AVENUE INVEST BERHAD
13) BIMB INVESTMENT MANAGEMENT BERHAD
14) CIMB WEALTH ADVISORS BERHAD
15) CIMB-PRINCIPAL ASSET MANAGEMENT BERHAD
16) CMS TRUST MANAGEMENT BERHAD
17) HONG LEONG ASSET MANAGEMENT BHD
18) HWANGDBS INVESTMENT MANAGEMENT BERHAD
19) ING FUNDS BERHAD
20) INTER-PACIFIC ASSET MANAGEMENT SDN BHD
21) KAF FUND MANAGEMENT SDN BERHAD
22) KENANGA FUND MANAGEMENT BERHAD
23) KUMPULAN SENTIASA CEMELANG SDN BHD
24) MAAKL MUTUAL BERHAD
25) MANULIFE UNIT TRUSTS BERHAD
26) MAYBAN INVESTMENT MANAGEMENT BERHAD
27) MIDF AMANAH ASSET MANAGEMENT BERHAD
28) OSK â€" UOB ISLAMIC FUND MANAGEMENT BERHAD
29) OSK â€" UOB UNIT TRUST MANAGEMENT BERHAD
30) PACIFIC MUTUAL FUND BERHAD
31) PELABURAN HARTANAH NASIONAL BERHAD
32) PELABURAN JOHOR BERHAD
33) PENGURUSAN KUMIPA BERHAD
34) PERMODALAN BSN BERHAD
35) PHEIM UNIT TRUSTS BERHAD
36) PHILLIP MUTUAL BERHAD
37) PRUDENTIAL FUND MANAGEMENT BERHAD
38) PBT UNIT TRUST BERHAD
39) PUBLIC MUTUAL BERHAD
40) RHB INVESTMENT MANAGEMENT BERHAD
41) SAHAM SABAH BERHAD
42) TA INVESTMENT MANAGEMENT BERHAD
