Thursday, January 12, 2012

Sources of Income in Unit Trust scheme. (RE-PUBLISHED)

If you are still following me with this topic, you might have understood about the differences between prices NAV of funds offered by UTCs and that of ASW/ASB.
This time around i am going to speak about the income sources offered between those 2 types of funds.Generally, funds offered by other UTC promises to offer 2 types of income, i.e. Capital Income and Distribution Income.
Capital Income is the profit you make from a sale of unit trust funds.
Distribution Income is the dividend declared on the funds in relation.
It is important to note that in ASW/ASB there is no capital gain income, just distribution! It means the price or NAV you bought, remains the same all the time.
In other UTC'S funds, prices or NAV are floated, that means the price changes accordingly based on demand.
So, it is always better to choose a scheme that provides us more than one source of income. In the case between ASW/ASB, it is better to invest in other company's funds that provides 2 sources of income.

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