Unit Trust 101

Growing Your Investments in a Changing World
Unit Trust 101
Introduction to Unit Trust
1. What is a unit trust fund?

A unit trust fund is a vehicle which enables individuals, corporations and institutions that have common investment objectives to pool their money. Professional fund managers then use this pooled money to acquire investments they consider will help meet those objectives. These investments are collectively referred to as the fund's assets. As a safeguard for investors, the manager is not allowed to hold the fund's assets in its own name. Instead, a trustee is appointed to act as custodian of the assets.

In summary, a unit trust fund is a three-way relationship between:

  1. a unitholder - who invests money in the fund by buying units.

  2. a trustee - who is required to use due care in protecting the unitholders' rights and interests. The fund's assets are held by the trustee and the trustee receives all income from those assets.

  3. a manager - who is responsible for setting and implementing the investment strategy and is also responsible for the proper administration of the fund.

2. How are unit trusts being regulated in Malaysia?
3. Can I switch from one fund to another?

Switching is allowed between funds managed by AmFunds Management Berhad subject to a fee. Please refer to the fund’s respective prospectus for more information.

4. Am I allowed to transfer my fund units to another person?

Transfer of the fund units is allowed at the Manager’s discretion, subject to a fee. Please refer to the fund’s respective prospectus for more information.

How to Invest?
1. Who is eligible to invest?

Individual Investors

For a single applicant
The applicant must be 18 years of age and above.

For joint applicants
The first named applicant must be 18 years of age and above. The joint applicant can be of any age.

Corporate Investors

Companies, co-operatives, societies, sole proprietors, institutions, etc.

2. What is the minimum investment required?

For most funds, the minimum amount is RM1,000. Please refer to the respective prospectus for more information.

3. What forms do I need to complete?

For applicants applying for AmCash Management account without cheque writing facility:

  • Account Opening form
  • One (1) set of specimen signature card
  • Pre-Investment form

For applicants applying for AmCash Management account with cheque writing facility:

  • Account Opening form
  • Three (3) sets of specimen signature card
  • The "Biro Maklumat Cek" Declaration Form
  • Pre-Investment form

For applicants of all other funds:

  • Account Opening form
  • One (1) set of specimen signature card
  • Pre-Investment form

4. What are the documents to be attached?

Individual investor

For a single applicant and first named joint applicants

  • photocopy of National Registration Identity Card (NRIC) or passport

For joint named applicants

  • photocopy of NRIC or passport of first applicant
  • photocopy of NRIC or passport or birth bertificate of joint applicant

Corporate Investors

  • a certified true copy of theMemorandumand Articles of Association or its equivalent
  • a certified true copy of Form 24 and 49 or its equivalent
  • an original copy of a Board Resolution approving investments in the fund or its equivalent
  • list of authorised personnel to effect any instructions pertaining to the fund if not mentioned in the Board Resolution or its equivalent
  • a copy of the latest audited Financial Statement of Accounts
  • any other approvals required from relevant authorities

5. What are the available payment modes?

Payments can be made using cheque, draft, or money order made payable to:

"AmFunds Management Berhad - Trust A/C 1"

Applicants are to write their names and NRIC numbers or passport numbers at the back of the cheque, draft or money order.

You can either mail the application with complete documentation and payment to us or give it to any of our distributors for delivery to us. If we do not receive complete documentation with the payment, we reserve the right to reject the application. If you deposit payment into our account and do not notify or provide us with the complete documentation, we shall reject your application and hold such amount until claimed.

Note: Where payment is by cheque, the cheque must be issued by the investor. Third party cheque paymentmust be accompanied with a properly signed letter fromthe issuer of the cheque stating that he/she is aware that the cheque is used for investment in unit trust by the investor duly named in the case of bank draft ormoney order, a copy of the application for the bank draft or money order as approved by the relevant bank/post office must be submitted with the bank draft or money order. If the draft is applied by a third party, then a letter from the third party attesting to the use of the draft for the investment in unit trust by the investor must be submitted.

Please send the payment, application form and other relevant documentation to us, or hand them to one of our person dealing in unit trust or institutional unit trust agents for delivery to us.

Please do not mail cash.

6. How do I make an additional investment?

You are required to complete a Transaction Form and forward it with payment as done under Question 5 above.

Regular savings plan/Autodebit plan (subject to terms & conditions)

You may make regular investments in the Fund by giving your bank a standing instruction. These payments must be for a minimum additional investment amount and can be made at regular intervals such as monthly, quarterly, half yearly and annually.

You are advised to notify us if you plan to make regular saving investment/autodebit plan in order to receive a copy of the latest Prospectus at each renewal date of the Prospectus to allow you to have updated information of the Funds.

You are also required to provide a copy of your bank pass book upon making regular saving investment/autodebit plan and deliver to us.

For Fixed Income, Equities, Mixed Asset Funds and Feeder Funds

All investments made through the regular savings and autodebit will be processed at the close of the Business Day (forward pricing) the Manager is notified of the investment by the relevant financial institution.

Automatic Teller Machine (ATM) investment (subject to terms & conditions)

For AmTotal Return, AmIttikal, AmCumulative Growth and AmCash Management
You will need to complete the necessary documentation available at the respective financial institutions to transfer minimum additional investment amounts from your savings account to your funds account with us.

You are advised to notify us if you plan to make ATM investment in order to receive a copy of the latest Prospectus at each renewal date of the Prospectus to allow you to have updated information on the funds.

All investments made through the ATM will be processed at the close of the Business Day (forward pricing) the Manager is notified of the investment by the relevant financial institution.

7. What is the minimum additional investment required?
Different funds have different minimum additional investments required. Please refer to the fund’s respective prospectus for more information.
8. When is the cut-off time for submitting an initial and additional investment request?
PROCESSING AN APPLICATION Cut Off Time /
Business Day

AmCash Management, AmIncome and AmAl-Amin

Processing Ordinary Application

If an application with cleared payments and complete documentation is accepted by us before 11.00 a.m on a business day, it will be processed on the same business day.

For EPF Investment Scheme

If an EPF application with cleared payments and complete documentation is received before 11.00 a.m on a business day, it will be processed on the same business day.

If an EPF application with cleared payment and complete documentation is received after 11.00 a.m or on a non-business day, it will be processed on the next business day.

11:00 a.m.
Monday to Friday
(except public holidays)

For All Other Funds

Processing Ordinary Application

If an application with complete documentation and payment are accepted before 4:00 p.m on a business day, it will be processed at the end of day (NAV per unit) of the same business day which will be computed on the next Business Day.

If an application received with complete documentation and payment are accepted after 4.00 p.m. or on a non-business day, the application will be processed at the end of the day (NAV per unit) of the next business day which will be computed on the business day after the said next business day.

Note: The Manager reserves the right to reject any application that is unclear, incomplete and/or not accompanied by the required documentation. Incomplete applications will not be processed until all the necessary information has been received.

For EPF Investment Scheme

If an application with complete documentation and payment are accepted before 4.00 p.m on a Business Day, it will be processed at the end of day (NAV per unit) of the same business day which will be computed on the next business day.

If an application received with complete documentation and payment are received after 4.00 p.m. or on a non-Business Day, the application will be processed at the end of the day (NAV per unit) of the next Business Day which will be computed on the business day after the said next business day.

Note: The Manager reserves the right to reject any application that is unclear, incomplete and/or not accompanied by the required documentation. Incomplete applications will not be processed until all the necessary information has been received. The Trustee's obligation in respect of monies paid by an investor for the application of units arises when the monies are received in the relevant account of the Trustee for the funds.

4:00 p.m.
Monday to Friday
(except public holidays)

9. What are the advantages of a regular savings / autodebit plan?

A regular savings plan is a cost-effective and systematic approach to accumulate assets in the long term. It is designed to take advantage of the dollar cost averaging concept by investing a fixed amount of money at regular time intervals (usually on a monthly basis) regardless of market fluctuations or whether the price of unit trust you are investing is low or high. Over a period ofmarket volatility, the average cost of investment is less than the average price of the fund because more units are bought when the price is low and fewer units when the price is high.

Over the long term, this strategy helps to smooth out the volatility of the market. Other benefits include prevention frominvesting a lump sum during theworstmarket condition and eliminates the need for “market-timing”.

Withdrawing Investments
1. What is the minimum withdrawal amount and minimum holding?

You may withdraw all or part of your units on any business day subject to the following minimum withdrawal and minimum holding amount unless it is a complete withdrawal. Please refer to the respective fund’s prospectus for more information.

2. How do I make a withdrawal?

You can make a withdrawal by completing a transaction form. A repurchase notice can take any of the following forms provided the terms and conditions for such repurchase notice are adhered to.

The tick (√) indicates the repurchase notice available for a fund.

 

AmCash Management

All Other Funds

Cheque writing facility

X

Facsimile instructions facility

Completing a transaction form

Authorising periodic payments

X

3. What is the manner of payment for withdrawal proceeds?

Withdrawal proceeds shall be paid by us in the following manner:-

  • Transfer to a bank account nominated by you in writing ; or
  • By cheque

No withdrawals will be paid in cash under any circumstances.

Please refer to the respective fund’s prospectus for more information.

Fees and Charges

GST Customer Notices

With effect from 1 April 2015, kindly be informed that all fees, charges and expenses disclosed in the Prospectus/Information Memorandum/Disclosure Document are expressed on a Goods & Services Tax (GST) - exclusive basis. Accordingly, to the extent that services provided are subject to GST, the amount of GST payable on any related fees, charges and/or expenses will be payable by the Unit Holder and/or the Fund (as the case may be) in addition to the fees, charges and expenses disclosed in the Prospectus/Information Memorandum/Disclosure Document.

Should you require more information on GST, please visit the Royal Customs website at www.gst.customs.gov.my

1. Will any entry charge and exit charge be imposed after I invest and withdraw my units respectively?

For investments made under the EPF Members Investment Scheme, the maximum entry charge is 3% of the NAV per unit. Notwithstanding the maximum entry charge shown, investors are advised that they may negotiate for lower entry charge with the distributor prior to concluding the sales.

2. Please elaborate on the management fee and trustee fee that I may incur when investing in a fund?

The annual management fee is to cover investment management and ongoing fund administration expenses, while the trustee is entitled to an annual trustee fee for acting as custodian of the fund's assets and safeguarding the unitholders interest.

3. What are the charges for switching fromone fund to another or transferring my investments to another person?

Switching fee

You can switch all or some of your investments from one fund to another by simply completing a switching form. It should be noted thatwhen you switch into a fund, the amount switched must meet the minimum application amount of that fund. You may be charged up to 6% of amount switched, per switch when you switch into any of the funds managed by us. However, wemay at our discretion waive or vary the switching fee of any fund to an amount not exceeding 6% of amount switched, per switch.

Transfer fee

You can transfer all or some of your investments to another person by simply completing a transfer form and signed by both parties (transferor and transferee). A specimen signature card is also equired to be filled by the transferee. A fee of RM50may be charged to the transferor for each account transferred. However, in the case of a deceased person, the transfer fee of RM50 will be waived.

4. Are they any other fees and charges that I need to be aware of?

Fund expenses

The Manager and Trustee may be reimbursed out of each fund for any cost reasonably incurred in the administration of the funds. The fund expenses currently include but are not limited to commission payable to brokers (if any), audit fee, tax agent’s fee, printing and stationery, bank charges, investment committee fee for independent directors, lodgment/delivery fee for fund’s reports, and other expenses as permitted by the Deed.

Bank charges/fees

When withdrawals are made, you may incur bank charges/fees.

Fees related to services provided by the Manager

Please refer to the fund’s prospectus for further details.

5. Please elaborate on Management Expense Ratio (MER) and its importance to investors?

The MER is the ratio of all the inherent costs incurred in operating the fund to the average NAV of the fund calculated on a daily basis. The MER which is paid directly from a fund includes the:

a. Manager's fee
b. Trustee's fee; and
c. Trust expenses.

A Fund's MER is calculated in accordance to the following formula:

MER = Fees of the Fund + recoverable expenses of the Fund
Average NAV of the fund calculated on a daily basis x 100%