70) “Refund”, “Exchange” & “Transfer” of Unit Trusts.

70) “Refund”, “Exchange” & “Transfer” of Unit Trusts.

Unit Trust Consultants (UTCs) were often asked what they are selling. Most of the time, the answer is Selling Unit Trusts.

After further discussion, the answers got more interesting. Some answers would be selling dreams, selling investment ideas, retirement planning, financial freedom, etc.

Let’s look at Selling of another product. 

Let’s say you want to buy a new Handphone. You go into a phone shop and look at the different models. After some consideration, you decide to buy one for RM2,000. You pay the money and leave the shop.

However, after one week, you changed your mind & decided to return the phone. Do you think you can get your money back? Most probably not.

The phone counter staff will most probably say,
“Sorry, NO Refund, NO Exchange.”

As you know, Unit Trust is not a physical object. No color, shape, taste, sound nor texture.
To purchase units of a Unit Trusts fund, you have to transfer money from one financial institution (eg. Bank) to another financial institution (UTMC).

One benefit of Unit Trusts is that you can easily get a “Refund”. You can get back your money within 10 calendar days. (The amount can be higher or lower than what you paid, depending on the fund price movements.)

This is known as Repurchase or Redemption.

You can also “Exchange” it from one fund to another fund. That means you can change your investments from:
a) one country to another country or to a few countries.
b) Equity fund to Bond fund, Balance fund, Money Market fund, etc.

This “Exchange” benefit is called Switching.

Another benefit is called Transfer. 

Just as you can transfer a car or house ownership, you can also transfer the fund ownership from one person to another. However, there are certain restrictions on who you can transfer the units to.

A UTMC usually allows the Repurchase and Switching to be done online at the investor’s convenience. For transfer, it has to be done at the UTMC’s office.

At the UTMC counter, you will hear,
“NO Worries. CAN Refund, CAN Exchange and CAN Transfer.”

After you had purchased Unit Trusts, you can easily Repurchase, Switch or Transfer the units.
So, you don't "buy" and "sell" Unit Trusts like the normal products. It is much more flexible. It is an investment for your future financial needs.

Please consult your Unit Trust Consultants to know more.

Note: UTMC is Unit Trusts Management Company

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