“How much was last year’s return?” is a question usually asked by those keen to invest in a unit trust fund. If the return sounds good, they will consider investing in it. But if they plan to invest in the unit trust funds for a short term, they could be in for a surprise because even though the return on investment may be high, some of it will be taken up by fees and charges imposed by the management company.

Find out about fees and charges
There are fees and charges which vary from fund to fund, but generally, unit trust management companies impose:

	Sales charge/entry fee (front-end load charge) – This is a one-off charge included in the selling price of the units. Normally, this fee is charged to cover the cost of establishing the investor’s holding, and to pay commission to consultants, unit trust agents etc.
	Repurchase fee (back-end load charge) – This is normally included in the fund’s buying price. However, this fee is seldom charged to investors.
	Management fee – This represents the management company’s fee for administering and managing the fund and is directly charged to the fund. This amount varies and depends on the management style of the fund i.e. active or passive. The fee is charged on an annual basis.
	Trustees’ fee – This is an annual fee paid to trustees for acting as custodians of the funds’ assets.
	Administrative fee – Direct fees or costs incurred. Includes fees and disbursements to the auditors, all expenses and disbursement incurred by trustees, duties and taxes payable in respect to the fund etc.
	Switching fees – Some management companies, with more than one fund under its management, would allow their unit holders to switch between funds. This switching facility enables unit holders to respond to changing financial objectives or goals and market conditions. A “switching fee” will be charged for this purpose.
	Transfer fee – Charge for transferring units to another investor.