Complete Guide to Unit Trust Investments in Malaysia (2026)

A unit trust is a fund that pools money from many investors and is run by a professional fund manager, who invests it in shares, bonds, money market instruments or other assets. In Malaysia, unit trusts are regulated by the Securities Commission Malaysia. You buy units at the fund's net asset value (NAV), usually plus a sales charge, and returns are not guaranteed.

Unit trusts are one of the most widely held investments in Malaysia. As of October 2026, there are 785 authorised unit trust funds offered by 39 management companies, with a combined net asset value of about RM634 billion (Securities Commission Malaysia, 31 July 2026).

Governed by the Securities Commission Malaysia, the unit trust framework prioritizes investor interests, guided by expert fund managers and trustees. This guide covers how unit trusts work, the main types, how to choose and buy one, what they cost and how they compare with ETFs and robo-advisors.

What is a unit trust?

Unit trusts in Malaysia are designed as a collective investment scheme where investors with similar financial objectives pool their resources. This pooled money is then managed by professional fund managers who invest in a diversified portfolio encompassing various asset classes such as cash, deposits, bonds, shares, properties, and commodities.

Investors in unit trusts do not directly own the assets in the portfolio; instead, they hold units representing their share of the fund. The value of these units varies with the fund's performance, offering potential returns through income distribution and capital appreciation. 

Unit trusts appeal to individuals seeking exposure to a broad range of investments without the complexity of managing a portfolio, aiming for higher returns over the medium to long term compared to traditional savings or fixed deposits, albeit with some level of investment risk.

Why invest in unit trusts?

Unit trusts let you hand day-to-day investment decisions to a professional manager and get a diversified portfolio with a relatively small amount of money.

For an individual to effectively manage their own investment portfolio, staying abreast of market trends and sentiments is crucial. In today’s complex financial markets, this requires digesting a vast array of information from countless sources.

For many investors, keeping up with this flood of data is daunting, if not outright impossible, leading to significant frustration as they struggle to stay informed.

Investing in unit trusts offers a solution by shifting the bulk of this investment expertise and responsibility to those best suited for it: professional fund managers. Beyond this pivotal advantage, unit trusts present several other key benefits worth considering:

• Professional Management: Expert fund managers take on the task of making informed investment decisions, using their skills and experience to potentially enhance returns.
• Affordability: Starting with a modest investment is possible with unit trusts, making it accessible to a wide range of investors. Some funds accept as little as RM100 (FIMM).
• Diversification: Unit trusts spread investments across various assets, reducing the risk associated with concentrating funds in a few selections.
• Liquidity: These funds offer the ease of buying and selling, providing investors with the flexibility to access their funds when needed.
• Wide Investment Exposure: They enable investment across diverse asset classes, often unattainable individually with limited capital.
• Diversification at a lower cost: Buying one fund gives you a spread of holdings that would cost more to build share by share. Keep in mind that sales charges and annual fees still apply (see fees below).
• Regulation: Unit trusts in Malaysia are regulated by the Securities Commission Malaysia, and each fund has an independent trustee. Regulation does not protect you from investment losses, and unit trusts are not covered by PIDM deposit insurance.

In essence, unit trusts simplify the investment process, making it more accessible, diversified, and managed by seasoned professionals, all within a regulated framework.

What types of unit trusts are there in Malaysia?

The main types are equity, fixed income, money market, balanced and Syariah-compliant funds, plus listed funds such as REITs and ETFs. Each carries a different level of risk.

In Malaysia, the unit trust landscape is diverse, offering various types of funds to meet the different risk appetites and investment goals of investors. Here’s a closer look at the types of unit trusts available:

1. Equity funds

Equity funds invest primarily in stocks of listed companies, making them a popular choice for those looking to gain exposure to the Malaysian stock market. The value of these funds tends to move with the market, offering higher potential returns at a higher risk. Within equity funds, there are:

• Aggressive Growth Funds: Target companies with high growth potential, albeit with greater risk.
• Index Funds: Aim to mirror the performance of a specific index, offering a diversified investment approach.
• International Equity Funds: Focus on investments in foreign markets, broadening the geographical exposure.

2. Fixed income funds

These funds invest in government securities, corporate bonds, and other fixed-income instruments. The aim is usually to provide steady income with less emphasis on capital growth, though there's potential for both gains and losses due to interest rate fluctuations.

3. Money market funds

Similar to a bank account, these funds invest in short-term, low-risk instruments, offering stability and quick liquidity. Unit prices tend to be stable but are not guaranteed, and these funds are not bank deposits.

4. Real Estate Investment Trusts (REITs)

REITs allow investors to put money into commercial real estate, making property investment accessible to smaller investors. This investment type provides exposure to the property market and portfolio diversification.

5. Exchange Traded Funds (ETFs)

ETFs are designed to follow the performance of a specific market index, combining the flexibility of stock trading with the diversification of index funds. They're known for their low expense ratios. Read more in What is an ETF?

6. Balanced funds

For those seeking exposure across multiple asset classes, balanced funds invest in a mix of equities, fixed income, and sometimes cash, aiming to reduce the risk associated with single-asset investments.

7. Syariah funds

Catering to investors seeking compliance with Islamic principles, Syariah funds exclude investments in companies involved in non-Shariah compliant activities such as conventional banking, gambling, and non-halal products.

How do you choose the best unit trust in Malaysia?

Start with your goal and how much risk you can take, then compare funds in the same category on long-term returns, fees and volatility, not just last year's performance.

Choosing the best unit trust involves a careful consideration of several factors, beyond just past performance. Here’s a guide to help you navigate the process:

1. Importance of performance

While performance data is crucial for evaluating a fund's success over time, it's not the sole factor to consider. Unit trusts don't guarantee returns; their value fluctuates with market conditions, which affects the rate of return. It's beneficial to assess performance across various time frames to get a comprehensive view.

2. Historical results

Remember, past performance doesn’t predict future outcomes. Still, understanding a fund's historical performance can provide insights into the fund manager's ability to navigate market cycles. Ensure the fund’s objectives and the manager’s strategy align with your investment goals.

3. Long-term performance

Focusing on long-term performance is advisable since financial markets and economies undergo cycles. Avoid the temptation to chase the latest high-performing funds, as their sectors may not perform as well in the future.

4. Comparing funds

Ensure accurate comparisons by evaluating funds with similar objectives and policies. Remember, the investment value can rise or fall, and currency exchange rate changes can also affect your returns, especially in offshore funds.

5. Measuring fund performance

Evaluate a fund's total return, which accounts for changes in unit price and assumes reinvestment of distributions. Total return can be presented as cumulative over time or as an average annual total return. Comparing a fund’s total return against similar funds or a relevant market index provides a clearer performance picture.

6. Information ratio

This metric measures a fund's performance relative to its risk, considering excess returns over a benchmark and the volatility of those returns. A higher information ratio indicates a fund has performed well given its risk level, offering a valuable perspective on the fund manager’s effectiveness.

7. Unit trusts fund performance rankings

Rankings and ratings help compare past performances but aren’t predictive of future success. Be informed by reading prospectuses and understanding a fund's objectives, risks, and management strategies.

8. Understanding unit trust risks

Investing in unit trusts involves several types of risk, including:

• Market Risk: The possibility of losing investment value due to economic conditions or political events.
• Liquidity Risk: The risk associated with the difficulty of selling an investment without a significant price change.
• Management Risk: The potential for fund losses due to poor management decisions.
• Inflation Risk: The danger that returns won’t outpace inflation, leading to a loss of purchasing power.
• Interest Risk: For fixed income securities, the risk that interest rate changes will affect the investment’s value.

What are the best-performing unit trusts in Malaysia?

There is no single best unit trust. Top-performer lists change often, and short-term leaders tend to cluster in one theme (in early 2026, gold and precious-metals funds), which can reverse quickly. Compare funds within the same category over five and ten years, after fees.

Use this checklist when comparing funds:

How do you buy unit trusts in Malaysia?

You can buy unit trusts directly from a fund management company or its registered consultants, through banks, on online fund platforms, or with part of your EPF savings. Minimum amounts and sales charges vary by channel and fund.

• Fund management companies and their consultants: You can invest a lump sum or set up a regular monthly savings plan. Check that your consultant is registered with FIMM.
• Banks: Many banks distribute unit trusts at branches and online; for example, Maybank customers can buy unit trusts through Maybank2u.
• Online fund platforms: Platforms such as FSMOne let you compare and buy funds from many fund houses in one place, often with lower sales charges than buying through an agent.
• EPF Members Investment Scheme (including EPF i-Invest): Eligible members below 55 can invest up to 30% of the savings in Akaun Persaraan that exceed their Basic Savings amount, with a minimum of RM1,000, in EPF-approved funds. Via i-Invest you invest online through your i-Akaun.
• Minimum investment: Some funds accept as little as RM100; others start at RM1,000.

Before you pay, read the product highlights sheet (PHS) and prospectus, which list the fund's fees, risks and objective.

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How do dividends (distributions) work in unit trusts?

A fund may pay out part of its income as a distribution. Your payout is the number of units you hold times the distribution per unit, and the fund's NAV per unit drops by the same amount, so your total value does not change on the day.

Unit trust funds do distribute dividends to investors, which represent a share of the earnings generated by the fund's investments. Here's an overview of how dividends work in unit trust funds and their implications:

How dividends are calculated

The amount you receive in dividends from a unit trust depends on two main factors:

• The number of units you hold in the fund.
• The dividend per unit announced by the fund.

Dividends are distributed from the fund's earnings and are paid to investors in cash or as additional units, depending on the option you choose. It's important to understand that dividends are not the same as the returns on your investment; they are a portion of the profits made by the fund from its underlying investments.

Impact of dividends on Net Asset Value (NAV)

When a unit trust distributes dividends, the Net Asset Value (NAV) per unit of the fund decreases by the amount of the dividend per unit. This is because the distribution of dividends reduces the total value of the fund's assets divided by the number of units outstanding.

Example:

• Suppose you own 1,000 units in a unit trust, with an NAV of RM1 per unit. Your investment's total value is RM1,000 (1,000 units x RM1 per unit).
• If the fund declares a dividend of RM0.05 per unit, you receive RM50 in dividends (1,000 units x RM0.05).
• After the dividend payout, the NAV per unit adjusts to RM0.95, decreasing the value of your investment to RM950 (1,000 units x RM0.95 per unit).
• However, when adding the dividend received to the new value of your investment (RM50 + RM950), the total remains RM1,000, equal to the investment value before the dividend distribution.

Purposes of dividends

Dividends serve several purposes for investors:

• Liquidity: They provide a way to receive cash from your investment without needing to sell any units, avoiding redemption fees.
• Reinvestment: You can use dividends to purchase more units in the fund, potentially increasing your capital gains if the NAV of the units increases in the future

What fees do unit trusts charge in Malaysia?

Expect a sales charge when you buy (up to about 5% of NAV for many equity funds, less for bond and money market funds), plus an annual management fee and trustee fee taken from the fund. Some funds also charge to redeem or switch.

When investing in unit trusts, it's crucial to understand the various fees and charges you may encounter, as these can impact the overall return on your investment. Here's a breakdown of common fees associated with unit trust investments:

Example: fees listed in two Public Mutual product highlights sheets

Fees differ between funds and change over time, so check the PHS of the fund you are considering. Sources: PWEF PHS, P Bond PHS.

Initial service charge

This is the fee charged at the time of investment into a unit trust, often referred to as the entry or sales charge. It's designed to cover the costs related to marketing and distributing the unit trust, as well as the ongoing service and advice provided by the unit trust consultant. 

Exit fee

Also known as the repurchase or redemption charge, this is a fee that may be deducted from the total amount when you sell or withdraw from your investment in a unit trust. The exit fee compensates the fund for the costs associated with your withdrawal and is typically a percentage of the amount being withdrawn. This fee tends to decrease the longer you hold your investment and may not apply after a certain period.

Annual management fee

This fee is charged for the professional management of the fund's investments. It covers the costs of portfolio management, including the manager's fees, audit fees, and other administrative expenses such as printing and distributing annual reports, mailing distribution checks, and other necessary administrative tasks. The annual management fee is deducted from the fund's assets and is reflected in the fund's net asset value (NAV). This fee is expressed as a percentage of the fund's assets under management and is charged annually.

Trustee fee

The trustee is an independent company that holds the fund's assets and checks that the manager follows the fund's rules. Its fee is a small annual percentage of the fund's NAV, listed separately from the management fee in the PHS, and is also reflected in the NAV.

A difference of 1-2% a year in fees adds up over a long holding period. See The long-term cost of unit trusts for a worked example.

What protections do unit trust investors have?

First-time investors get a six-business-day cooling-off period, and every fund is regulated and has an independent trustee. Unit trusts are not protected by PIDM, so your capital is at risk.

Cooling-off period

If you are investing in a fund management company's unit trusts for the first time, you have six business days to change your mind. You get back the lower of the NAV per unit on the day you bought or the NAV when you cancel, plus the full sales charge, within seven business days. Staff of the fund company, people registered to sell its funds, and corporate or institutional investors are not eligible.

Are unit trusts protected by PIDM?

No. PIDM states that unit trusts, stocks and shares are not eligible for deposit insurance. PIDM covers eligible bank deposits up to RM250,000 per depositor per member bank, but a unit trust bought at a bank is still an investment, not a deposit.

Unit trusts vs ETFs vs robo-advisors: what's the difference?

All three give you a diversified portfolio. The main differences are how you buy them, how they are priced and what you pay.

If you are weighing these against lower-risk options, see safe and low-risk investments in Malaysia.

Frequently asked questions

Is a unit trust a good investment in Malaysia?

It can be, if you want a professionally managed, diversified portfolio and can stay invested for several years. Returns are not guaranteed and unit prices go up and down. Fees matter too: a sales charge of up to about 5% plus an annual management fee can take a noticeable share of your returns over time, so compare costs before you buy.

How much money do I need to start investing in unit trusts?

It depends on the fund. FIMM says you can start with as little as RM100 with some funds, while others ask for more; for example, several Public Mutual funds set a minimum initial investment of RM1,000. Many fund houses also let you add smaller amounts through a regular monthly savings plan.

What fees do unit trusts charge?

Most unit trusts have a sales charge when you buy, an annual management fee and an annual trustee fee, both taken from the fund's assets. Some also have a redemption or switching fee. As an example, one Public Mutual global equity fund lists a sales charge of up to 5.0%, a 1.70% management fee and a 0.06% trustee fee a year.

Are unit trusts protected by PIDM?

No. PIDM states that unit trusts, stocks and shares are not eligible for deposit insurance. PIDM protects eligible bank deposits up to RM250,000 per depositor per member bank, but a unit trust you buy through a bank is an investment, not a deposit, so you can lose money if the fund's value falls.

Can I cancel a unit trust investment after buying?

Yes, if you are a first-time investor with that fund management company. You get a cooling-off period of six business days to change your mind. The refund is based on the lower of the NAV on the day you bought or the NAV when you cancel, plus the sales charge you paid. Staff of the fund company and its registered consultants are not eligible.

Can I use my EPF savings to buy unit trusts?

Yes, through the EPF Members Investment Scheme, either via an agent or online through EPF i-Invest. Eligible members below 55 can invest up to 30% of the savings in Akaun Persaraan that exceed their Basic Savings amount, with a minimum of RM1,000. Only funds approved by EPF are available.

What is the difference between a unit trust and an ETF?

Both pool investors' money into a portfolio. A unit trust is bought from the fund company or a distributor at its daily NAV and is usually actively managed. An ETF is listed on a stock exchange, so you buy and sell it through a broker during market hours, and most ETFs track an index, which tends to keep annual fees lower.