Investors of unit trust funds are likely to range from conservative to moderate, and sometimes even aggressive in their investment outlook. They seek long-term capital growth on their investments at an acceptable level of risk, and with minimal volatility to their investments. Investing in unit trusts thus provides them with the avenue to achieve their long-term financial goals while satisfying these investment criteria.

Understanding the Investor's Profile

Conservative investor

Believes that security is primordial and wishes to reduce price fluctuations to a minimum. Market losses tend to trigger strong emotional reactions among such investors.

This type of investor generally wishes to earn steady returns in the form of interest or dividend payments. He prefers low-risk investment categories, such as money market or bond funds. These sorts of investment categories provide investors with consistent although lower returns on investments.

Moderate investor

Seeks equilibrium between security, capital growth and capital income. Investors in this category tend to have more moderate emotional reactions, though they are not indifferent to market losses.

Moderate investors are willing to tolerate certain risks in order to realise long-term gains. They favour investment funds composed of variable equity and bond segments, such as asset-allocation funds.

Aggressive investor

Prefer capital growth to investment income. Their emotional reactions are restrained and their confidence in the long-term market outlook remains intact, even during severe market corrections. They seek investments likely to generate above-average returns over the medium and long term. Therefore, investors in this category naturally prefer pure equity funds, such as emerging market sector or hedge funds.