75) Can you lose all your Investment in a Unit Trust Equity Fund?

75) Can you lose all your Investment in a Unit Trust Equity Fund?

Basically the question also means that your Unit Trust fund become ZERO value. Comparing to investing in a company's share, you can lose the investment if the company goes bankrupt.

As you know an Equity fund invests into Shares, Bonds and Money Market. Most Equity funds also invest into local & foreign companies.

So, for an Equity fund to lose everything means that all the money market, bonds, shares in local and foreign countries go bankrupt at the same time. But if that happens, any money you have may not have any value at all.

Maybe another way is that the fund managers are so bad that they keep making loses in the investments. And the investment charges and fees wipe out whatever is left.

Also, the investment committee, management team, trustee and whoever involved in that fund did not do their job to supervise and monitor.

It is still possible to happen in a very, very small possibility.
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The next question you should ask is,
“Do you want to miss the opportunity to make more money, because of the very small possibility to lose everything?”

Weigh the Reward vs Risk possibilities. 

There is no Reward without Risks.

Comments by John Lim:

Unlike the very early years of the unit trust industry, there are now stringent regulatory requirements imposed by the Securities Commission to ensure that unit trust funds are not concentrated in any particular company.

This provides an additional safeguard that should a company that the fund invests in goes into bankruptcy, the fund though affected will not itself suffer substantial losses.