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Tutorial For UT Exam PDF
Tutorial For UT Exam PDF
Tutorial For UT Exam PDF
By
CONTENT
Chapter 1: Understand Unit Trust
Chapter 2: Regulation of Unit Trust Industry
Chapter 3: Servicing Clients and Marketing Unit
Trust
Chapter 4: Industrial Code of Ethics and
Standards of Professional Conduct
Chapter 5: Personal Financial Planning
Chapter 6: Operations of Syariah-Based UTS
BENEFITS OF UTS
Diversification
Ready access to funds / liquidity
Professional management
Investment exposure
Lower investment cost
DISADVANTAGE OF UTS
Risk
Loss of control
Fees and Charges
Opportunity cost
LUMP SUM
METHODS OF
STANDARDS
REINVESTMENT
OF DISTRIBUTION
REGULAR SAVING
BORROWING TO INVEST
(GEARING /LEVERAGING)
RISK OF BORROWING
Interest rate fluctuation
Default in payment of loan
TRUSTEE
Roles & Responsibilities
Safeguards UTS assets
Ensures funds are invested in accordance with
deed & objectives
Supervises the operations
Approves & monitors all financial transactions
Collects all incomes Maintains registration of
unitholder
UNIT HOLDERS
Roles & Responsibilities
Invest & responsible for fees that earned by
UTMC & trustee Promotes & distributes UTS
Reap the rewards of the fund
TYPES OF UTS
Unlisted / Open Ended
Prices remains unchanged within same Prices fluctuate throughout the day
trading day
and from time to time
Size of fund increase with the creation
of unit and decrease with the
cancellation of units
CLASSIFICATION OF UTS
Equity
Fixed income
Money market
Exchange traded fund Balanced
Syariah
Government sponsored
Equities
Aggressive equities
Balanced Equities
Bonds (fixed income )
EQUITY UTS
Aggressive growth funds Fixed income
Index fund
Income fund
International fund
BALANCED UTS
Generally has a portfolio comprising equities
fixed income securities, cash & property
Exhibit lower volatility than most single asset
class of UTS
Prospect of returns higher than money market
UTS, saving accounts and fixed deposits
SYARIAH UTS
Catered for syariah cencerned investors
Invest in a portfolio of halal companies, islamic
Debt Securities & Bonds or other securities in
accordance of Syariah principle
Returns will also avoid the incidence of the riba
or usury interest
GOVERNMENT SPONSORED
UTS
E.g. ASH, managed by PNS
Generally invest on a balanced basis although
equity invested UTS are also available
Equity invested may have fluctuating and
variable unit price
Balanced basis normally have fixed RM1.00
u/p
COLLECTIVE INVESTMENT IN
MSIA
CIS in Msia includes:
UTS
Pension and provident funds
Insurance plan
Pilgrims funds
Investment-linked Funds
PROSPECTUS
Legal document containing legal accounting
and investment terms
No sales can be made without a prospectus
Each UTS must provide prospectus
Updated every 12 months
Purpose
Provide necessary information
Make an information investment decision
MER EXAMPLE
RM
Management Fee
31,764
Trustee Fee
6,078
Auditors Fee
1,200
2,482
Total expenses
41,524
3,122,250
= 1.33%
MEASURING PERFORMANCE
Raw return
Compounded annual return
UTS Performance Table
Total Returns over various time periods
Ranking & quartiles
Funds under management
Benchmark
Risk measures
Consistency
Qualitative factors
UNIT PRICE
2 set of units price: Selling & Repurchase price
W.e.f. 1 July 2007, regime for pricing of UTS has changed
from dual-pricing to single pricing
UNIT PRICING
Calculation of NAV comprises of:
Forward pricing
Transaction done based on the price which will be determined at the
end of the day
Distributions
Payments made to unitholders out of the accounting income of UTS
To be paid or reinvested
End of year
4%
4.8%
10 years
222.37 239.72
5%
244.334
RULE OF 72
72
Given interest rate
72
Given inflation rate
10
Actual
Investment
return %
(b)
Return
Inflation
after tax
rate (d) %
% (c) =(b)((a)x(b))
Return
after tax &
inflation %
= ( c)- (d)
5.0
4.5
-0.3
10.0
9.0
12.0
10.8
4.8
+4.2
+6.0
Exercise :
1. Net asset Value is RM250,000 while units in circulation is 1,000,000 units for
fund ABC. Calculate the NAV per unit for FUND ABC
a) RM 0.25
c) RM 0.24
b) RM 0.27
d) RM 0.23
2. Assume that Mr Z wants to invest RM32,000 into Fund ABC. Calculate the
number of units he will get from their investment (Service charge paid
seperately)
a) 118,518.52 units
c)133,333.33 units
b) 128,000.00 units
d) 139,130.43 units
3. Compute he Trustee fee from MER calculation of Fund A
Auditors Fee = RM200
Management fee = RM15,000
Printing annual report=RM500 Printing interim report=RM500
Other expenses RM 5,000.00 Trustee fee = ?
Average fund size is RM1,500,000 and the MER is 1.47%
a) RM800
c) RM700
b) RM850
d) RM750
4. A UTMC declare a unit split 1:10. The NAV per unit split is RM500,000,000.
Units in the circulation per unit split are 250,000,000 units. What is the NAV
per unit after the split?
a) RM 1.71
c) RM 1.80
b) RM 1.70
d) RM 1.82
5. Tax rate
:
20%
Inflation rate :
4.5%
Rate of return:
11%
What are the effective rate of return after tax and inflation?
a) 4.5%
c)4.3%
b) 4%
d)4.2%
6. Assume that the inflation rate raise up to 4.3%, what is the effective of
return?
a) 4.5%
c) 4.3%
b) 4%
d) 4.2%
7. Based on Q5 and Q6, what is/are the conclusion(s) that can be made?
I.
Inflation rate will erode the effective rate of return
II.
Tax rate will not erode the effective of return
III. In order to have positive effective rate of return, one has to ensure
that the rate of return
IV. After tax is greater than inflation rate
a) I, III
c) I, II
b) III only
d) I, IV
8. Arrange accordingly from the highest risk fund to the lowest risk fund rate
I.
Equity fund
III.
Balance fund
II.
Money Market fund
IV.
Hedge fund
a) I, II, III, IV
c)III, IV, II, I
b) IV, I, III, II
d) I, IV, III, II
9. Which of the following best describes a close ended fund?
a) Units are not quoted in an exchange
b) Prices are determined by the market forces of demand and supply in
Bursa Malaysia
c) Prices remain unchanged throughout trading day
d) Forward pricing is practiced
14. Mr. A chooses Real Estate Investment Trust (REIT) that invests in real
property which provides him with an opportunity to participate in property
market in a way which is normally impossible for an individual investor like
him as he only has RM1,000. The statement below are valid about REIT
except
a) All REIT are open ended fund and the units are not listed in the stock
market
b) Return from property comprise net rental income, plus or minus any
charge in the value of the property over the period
c) Units in the listed REIT can be bought and sold through stockbrokers,
and UTC would not normally arrange to buy or sell units for an investor
d) The prices at which units in REIT trade on Bursa Saham will reflect the
returns.
15 A gradually decreasing MER over the period of several years indicates that
a) The fund manager is reducing the annual management fee
b) The management company may be managing its operating cost
effectively for its fund size
c) The performance of the fund is getting better than previously
d) The performance of the fund is getting worse than before
19. Fund X
Fund Y
Equity 10%
Equity 90%
Money Market 90%
Money Market 10%
Which statement is true?
I. If interest rate rises, it will give an adverse effect on Fund Y
II. If interest rate rises, it will give a positive effect on find X
III. If stock market perform well, it will give a positive effect on fund X
IV. If stock market perform well, it will give an adverse effect on fund Y
a) I and II
c) II, III and IV
b) III and IV
d) all of the above
20.What is your understanding of call margin
a) It is the amount the investor might have to pay his/her financer if the
credit of unit trust loan falls beneath a certain level
b) It is a type of processing fee imposed by financer to finance unit trust
investment
c) It is a financers marked up margin imposed on top of base lending rate
applicable
d) It is charges imposed on future contract
REGULATION STRUCTURE
The Securities Commission (SC)
Securities Commision Act 1993
Capital Markets and Services Act 2007 (CMSA)
Covering UTMC, UTS, IUTA, CUTA, UTC and fund manager
OTHER GOVERNMENT
REGULATORS
Regulatory Structure
Regulated activity:
Dealing in securities (restricted dealing in UT), fund
management, investment & financial planing