The simple answer is a unit trust is a form of collective investment constituted under a trust deed. A unit trust pools investors’ money into a single fund, which is managed by a fund manager.

A trust is established for un-related parties with a payment of an amount, called “initial sum” by the initial unit holders to the trustee to be held in trust in accordance with the deed for the benefit of the unit holders. A unit trust is a trust where the rights of the beneficiaries (unit holders) to income and capital are fixed.

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