Page 53 - Profiles's Unit Trusts & Collective Investments - September 2024

Basic Concepts

compares favourably to the average entry costs of those unit trusts that still levy initial fees,
especially if financial advisor commissions are included. The majority of unit trusts, however, no
longer charge upfront fees. The costs of maintaining an online stockbroking account are low.
Typically a small fixed monthly custodial fee is levied, not a percentage of portfolio value. This
makes stockbroking accounts cost-effective for larger amounts of capital.
Overseas, investment trusts are considered more risky than unit trusts because they can invest
in unlisted shares and physical property, and because they can borrow money and use derivatives
without any material regulatory restrictions. They remain popular in the United Kingdom.

Profile’s Unit Trusts & Collective Investments — Understanding Unit Trusts 51