Unit Trust Funds
What are unit trust funds?
Unit trust funds (or mutual funds) are medium-to long-term investment products that give investors the opportunity to diversify even in a small investment amount in equities, bonds/sukuk, currencies and commodities in markets around the world. This is achieved by combining the funds of many investors into a pool of funds, which can be spread over a number of different investments and over a wide geographical area. This range of investments is called a portfolio.
Other Unit Trust Funds FAQS
How will unit trust funds benefit me?
- Spreading the risk: You spread your investment across a diverse portfolio. This is usually less risky as compared to investing in a single stock. Level of risk and returns also vary between different funds
- Professional management: Unit trust funds are managed by fund managers, who specialise in equity analysis and managing investments
- Access to markets: Not easily accessible to individual investors
- Economies of scale: With a large number of investors contributing to a single fund, operating costs and commissions can be amortised, making it possible for individual investors to pay lower fees
- Liquidity: You can buy and sell unit trust funds on any dealing / business day (established in the respective fund’s prospectus). Your money doesn't necessarily need to be tied up only for a specific period of time
- Higher potential returns: Some unit trust products help you gain exposure to high growth regions, sectors or asset classes. They could carry more risk than funds that are traditionally more diversified, but they potentially offer greater returns on your investment
- You can also refer to the Federation of Investment Managers Malaysia's ("FIMM") website for additional information
What are open-ended and close-end unit trust funds?
There are 2 types of unit trust funds in the market: open-ended funds and close-end funds.
- Open-ended fund: This type of fund has no restrictions on the amount of units the fund will issue. When an investor purchases units in such funds, more units will be created to meet the purchase request. When investors redeem their units, the units will be cancelled. If the redemption amount is high, the fund manager may have to sell some of the fund's investments / underlying assets in order to meet the redemption request.
- Close-end fund: This type of fund has a limited number of units. Unlike open-ended funds, new units will not be created by the fund manager to meet demand from investors. Closed-end funds are intended to be held by investors until maturity, as premature redemptions may incur an exit fee.
What are the different types of unit trust funds available through HSBC Bank Malaysia Berhad & HSBC Amanah Malaysia Berhad ("HSBC")?
We offer different types of unit trust Funds.
- Equity fund: This type of fund generally invests in equities or securities of listed companies and is suitable for investors seeking capital growth over a medium to long-term period.
- Balanced / mixed asset fund: This type of fund generally has a portfolio comprising equities, fixed income securities and cash. Such funds generally have a certain ratio of equity and fixed income securities that reflect either a moderate (higher equity component) or conservative (higher fixed-income component) orientation, and are suitable for investors seeking a potential regular income and modest capital appreciation over a medium- to long-term period.
- Fixed income (or bond/sukuk) fund: This type of fund invests primarily in bonds/sukuk and other debt instruments. The exact type of debt instruments such funds invest in depends on their investment mandates or focus, but generally may include government, corporate, municipal and convertible bonds, along with other debt securities like mortgage-backed securities. These funds are suitable for investors seeking a potential regular income with less emphasis on capital growth.
- Capital protected / non capital protected fund: A capital protected fund is a unit trust fund where the investor's principal amount is shielded from losses. A non capital protected fund is a unit trust fund where the principal amount is not protected, for example, an open-ended equity fund.
- Islamic / Shariah compliant fund: A unit trust fund can also be categorised as an Islamic / Shariah compliant fund. The main objective of Islamic / Shariah compliant funds is to provide an alternative avenue for investors sensitive to Shariah requirements. An Islamic / Shariah compliant fund will exclude those companies involved in Shariah non compliance activities or businesses such as conventional banking, insurance and financial services, gambling, alcoholic beverages and non-halal food products. An Islamic/Shariah compliant fund must follow a variety of rules, including investing only in Shariah-compliant companies, appointing a Shariah Board, carrying out an annual Shariah audit and purifying certain prohibited types of income, such as interest, by donating them to a charity.
How is investing in unit trust funds different from investing directly in stocks?
Unit trust funds are actively managed baskets of stocks, designed to outperform a benchmark with the assistance of a fund manager. A unit trust fund generally holds a large number of stocks, where each stock may only comprise a small percentage of the portfolio. As a result, the portfolio is automatically diversified and comprises a large variety of stocks. Individual stocks, on the other hand, can be purchased by any investor through a broking firm, where the investor makes the ultimate decision in the stock selection. Investors who are interested in active trading may be better suited to invest directly in stocks. However, both investment products carry inherent pros and cons, which is why it's important for investors to understand the differences between them.
How do I buy/sell unit trust funds through HSBC?
We offer a wide range of unit trust funds for our customers to choose from, according to their investment objectives, financial situations, risk appetites and specific needs. If you are an existing HSBC Bank or HSBC Amanah customer with a sole unit trust investment account, you may execute your unit trust transactions by logging on to HSBC Malaysia online banking via our website and select 'Unit Trust Browser' under 'Our products' menu. Alternatively, you may contact your Relationship Manager or visit your nearest HSBC Bank or HSBC Amanah branch for an individual financial review, risk tolerance assessment and profiling of your investment preferences.
How soon will I get my funds back upon redeeming my unit trust investment?
Redemptions are payable within 10 working days from the date the redemption request is submitted and the redemption price is based on forward pricing (the net asset value per unit at the next valuation point after the request is received).
What are the risks associated with investing in unit trust funds? Do all unit trust funds carry the same risks?
All unit trust funds are subject to investment risks, including the possible loss of the principal amount you invested. Different types of unit trust funds carry different levels of risk. Some are higher in risk than others. The general risks of investing in unit trust funds include: returns not being guaranteed, general market risk, security specific risk, liquidity risk, inflation risk, risk of non-compliance and manager/management risk. For further details / additional information on each type of risk, refer to each respective fund’s latest prospectus. A copy of the prospectus can be obtained from HSBC branches and the respective fund house’s offices. An electronic copy of the prospectus is also available on the respective fund manager’s official websites or 'Unit Trust' section on our website. You can also refer to the Federation of Investment Managers Malaysia ("FIMM") website for additional information on the funds.
Is there a currency risk associated with investing in unit trust funds?
Currency risk, also known as foreign exchange risk, is a risk associated with investments denominated in foreign currencies. A Malaysian Ringgit-denominated unit trust fund that has an investment mandate to invest offshore (for example, investing in global / regional market securities denominated in other foreign currencies), will be exposed to foreign currency fluctuations due to exchange rate movements between the Ringgit and that of the assets which are denominated in currencies other than the Ringgit. When the foreign currencies fluctuate in an unfavourable manner against the Ringgit, your investments will meet with currency losses, in addition to capital gains / losses. This may lead to a lower overall net asset value of the Fund.
What are the different fees and charges involved with unit trust funds?
There are 3 main types of fees and charges involved in a unit trust fund.
- Initial service charge / sales charge / front end load: These are upfront costs that an investor incurs upon subscription / purchase. This type of cost is levied primarily to cover the marketing and distribution of the unit trust funds, as well as monitoring of the investor’s investments by the unit trust consultant for the duration for which the investment is held.
- Exit fee: This fee is also known as a redemption fee, back end load or contingent deferred sales charge. The exit fee is charged to an investor for withdrawing the units prior to a previously stipulated date (for example: an exit fee of 1% will be imposed if the investor redeems funds within 6 months from the date of purchase). This fee represents a deduction from redemption proceeds by the fund manager. Normally, the exit fee charged is ploughed back into the unit trust fund.
- Annual management fee: Management expenses include expenses for portfolio management, trustee and custody fees, audit fees, administrative charges like printing of annual reports, distribution management, postage and other services incurred in the administration of the unit trust fund. These costs are paid out of the fund's assets.
There are other direct and / or indirect fees and charges that may be charged to a fund. It's important for you to consider them carefully before investing in a fund. For further details / additional information on fees and charges, please refer to the respective fund’s latest prospectus.
Where can I see these charges?
You may go to the 'Wealth dashboard' in our public website, click on 'Unit Trust' and access the 'View Funds' function to view the full range of unit trust funds we distribute, as well as their fees and charges. This function also allows you to download the unit trust prospectus if you require to have a more in depth breakdown of the fees and charges of each fund.
Where can I get information on the various unit trust funds distributed by HSBC?
You may go the 'Wealth dashboard' in our public website, click on 'Unit Trust' and access the 'View Funds' function to view the full range of unit trust funds we distribute. You may also use this function to retrieve fund information, download documents and perform analysis of the funds.
Will HSBC provide me with regular statements for my investment?
Yes. You will be receiving transaction advice and monthly statements for your unit trust investments with us, depending on your selected mode of delivery (i.e. email statement or hardcopy statements) during investment account opening with us. Alternatively to view your current unit trust portfolio, you may also log on to HSBC Malaysia online banking and access 'Wealth dashboard' via the 'Investment - Unit trust' section; or access the 'Wealth' tab via your HSBC Mobile Banking app.
What's changing? What is EZInvest?
We've introduced a new unit trust investment tool in our HSBC Malaysia Mobile Banking app called EZInvest.
This is HSBC Malaysia’s first digital initiative that offers a simple, flexible, and competitively priced unit trust investment solution exclusively through our HSBC Malaysia Mobile Banking app.
Other EZInvest FAQs
Who can use EZInvest? What can customers do with EZInvest?
To use EZInvest, customers must first have either an HSBC Bank or HSBC Amanah settlement and investment account which can be opened at any HSBC or HSBC Amanah branches. Since EZInvest is a mobile-only service, customers would have to download the HSBC Malaysia Mobile Banking app in order to access this service.
On EZInvest, customers can (i). Buy funds and place orders on lump sum purchases or monthly investment plans; and (ii). Sell funds or terminate plans.
How many funds are available and what are they?
EZInvest consist of a selected list of funds with different risk levels to cater for investors of different risk appetites.
Are the funds available in MYR only? Can I buy or sell the funds in other currencies?
EZInvest only supports buying and selling of funds in MYR only. Buying and selling of funds in currencies other than MYR is not available on EZInvest.
Will EZInvest be available on desktop / PC / Internet Banking / branch?
EZInvest is exclusively available on the HSBC Malaysia Mobile Banking app so customers can invest no matter where they are. If customers are interested, existing HSBC Malaysia Mobile Banking app users can access this from the app by going to Products and Services > EZInvest.
Can you help me subscribe to the fund offered by EZInvest in a branch?
The funds offered through EZInvest are also available for subscription in branch. However, to take advantage of an exclusive sales charge that's only available when you use the app, you should subscribe to the service through EZInvest.
I would like to find out more information and get more investment ideas based on current market conditions. Where can I go to find out more?
To get exclusive analysis and insights, visit the Wealth Insights section of our website.
What's the minimum amount I can invest on EZInvest? Are there any maximum and minimum limits on buying and selling units?
Different funds have different minimum investment amounts, depending on the minimum amount stipulated within the fund’s prospectus.
For redemption orders, the maximum unit selling limit is the number of tradable units hold by the customer.
For partial redemption orders, each fund has a minimum number of units needed to be maintained in customer’s holdings, which is stipulated in the fund’s prospectus. We can't proceed with any sell order that results in the total units of the customer’s holdings in that fund to fall below the minimum remaining units.
How much is the sales charge for Unit Trust subscription?
Each Unit Trust subscription will be charged at a flat 1% - 1.5% of the investment amount, depending on the fund type.
Are there any other fees for investing in Unit Trusts?
Yes, there are other fees charged by the fund house. These fees, which may include an annual management fee, trustee fee, admin fee, and so on, won't be deducted from your settlement account. However, they will be reflected in the market value of your holdings. You can see any fees imposed on your Fund details, Order details and Order review screens. Please refer to the fund offering documents for more details.
What are Conventional Unit Trust funds?
Unit Trusts are collective investments that pool investors’ money into a single fund managed by approved professional investment managers. Unit Trusts allow you to invest through a diversified approach which offers you liquidity as the units are easily bought or sold. Unit Trusts which are not based on Islamic principles are called Conventional Unit Trusts.
What are Shariah-Compliant Unit Trust funds?
Shariah-Compliant Unit Trusts are based on Islamic principles, which pool investors’ money into a single fund managed by approved professional investment managers. Shariah-Compliant Unit Trusts allow you to invest through a diversified approach and offer you liquidity as the units are easily bought or sold.
How are the Unit Trust prices calculated?
Unit Trust prices are calculated based on the net asset value of the funds.
How is Unit Trust performance calculated?
Unit Trust performance is calculated on a NAV to NAV basis, with dividend reinvested.
What is an unrealised gain / loss?
An unrealised gain / loss is the change of the market value of the funds you hold which have not been redeemed.
Will the return stated on the funds indicate the return I'll receive for my investment?
No, the return is the past performance of the respective funds and should be considered alongside the other fund details. Past performance is not indicative of future performance.
Do the funds provide a guaranteed return or any capital protection?
No, there's no guaranteed return or capital protected Unit Trust funds on this app. To understand the risk you’re taking, you can refer to the product risk level on the fund details page.
Product risk level is derived based on our quantitative evaluation of the price volatility, issuer risk, contractual maturity and qualitative factors. The meaning of each risk level is:
Low (1) - Minimal chance of losing a significant portion of your capital over the term of the investment, although this is not guaranteed. Expected to demonstrate minimal price fluctuations over short periods of time.
Low to Medium (2) - Low chance of losing a significant portion of your capital over the term of the investment, although this is not guaranteed. Expected to demonstrate moderately low level of price fluctuations over short periods of time.
Medium (3) - Moderate chance of losing a significant portion of your capital over the term of the investment, although this is not guaranteed. Expected to demonstrate moderate level of price fluctuations over short periods of time.
Medium to High (4) - Moderately high chance of losing a significant portion of your capital over the term of the investment. Expected to demonstrate moderately high level of price fluctuations over short periods of time.
High (5) - High chance of losing a significant portion of your capital over the term of the investment. Expected to demonstrate high level of price fluctuations over short periods of time.
Will the Unit Trust funds' dividends be reinvested or distributed back to the investors?
All the Unit Trust funds' dividends will be reinvested back into the portfolio.
How often will a Unit Trust fund pay dividends to the investors?
The frequency of a Unit Trust fund's dividend payout depends on the respective fund's dividend policy. For details of the dividend payout, you can refer to the respective fund's offering documents.
The list of Unit Trusts in this app is not what I want. Where can I look for other investment products?
This app offers a selection of retail unit trust funds, but these don't reflect the full range of Unit Trust products offered by HSBC Malaysia. If you’re looking for more Unit Trust funds or other investment products, visit the HSBC website or our branch for more information.
What is the settlement date for a Monthly Investment Plan (MIP)?
Different funds will have different settlement dates because of different settlement lead-times. You can refer to the respective fund offering document for more details.
Can I cancel my Monthly Investment Plan (MIP) before it ends?
Yes, you can cancel your MIPs anytime prior to the next Debit Date*, at no cancellation charges.
*Debit Date is the date when the investment amount is deducted from your settlement account.
What happens if the linked settlement account to my MIP has an insufficient balance?
The MIP plan will check against the balance of your settlement account for a total of 10 attempts, across a period of 3 months. If, at the 10th attempt, it's detected that your settlement account still has an insufficient balance, the MIP will be terminated automatically.
Will the bank provide a statement of my investments regularly?
Yes, you can find your funds and transaction records in your monthly statement. You can also find the transactions details in the transaction advice you receive for the transactions you've made in this app.
Using this app, will I be able to review the holdings and transaction records of all of my funds in HSBC?
No, you won’t be able to review all of the Unit Trust funds in your HSBC holdings through this app. You’ll only be able to review the Unit Trust funds that are offered by this app. Please log on to your Wealth Dashboard on HSBC online banking to review the holdings and transaction records of all your funds.
What is the cooling-off right, and how do I exercise it?
The cooling-off right provides investors who invest into a Unit Trust offered by a fund house for the first time an opportunity to get a refund of the initial investment. This right can be exercised during the first 6 business days of the subscription being made. To exercise this cooling-off right, please visit any HSBC Bank or HSBC Amanah branch.
Where can I channel my feedbacks, enquiries and complaints in regards to my unit trust investments?
For any feedback, enquiries or complaints, please contact HSBC at 1 300 88 1388 or you may write to us at the following correspondence address:
Customer Experience Team
HSBC Bank Malaysia Berhad
No. 2, Leboh Ampang,
50100, Kuala Lumpur
Fax: 03-2179 1111
Alternatively, if you require an external channel for feedback and complains, please refer to the contact as below :
Securities Industry Dispute Resolution Centre (SIDREC)
Phone No : 03-2282 2280
Fax No : 03-2282 3855
Email : firstname.lastname@example.org
Address : Securities Industry Dispute Resolution Centre (SIDREC)
Unit A-9-1, Level 9, Tower A
Menara UOA Bangsar
No 5 Jalan Bangsar Utama 1
59000 Kuala Lumpur