A unit trust is a portfolio of stocks, bonds, property, cash or other asset classes, chosen by professional fund managers according to themes and styles of investing.
The manager buys these securities on behalf of the fund, which is then split into equal units which are sold to investors. In an open-ended fund, the number of units is unlimited so more investors can pile into the fund.
The fund is priced daily according to the net asset value of the underlying investments. Dividends and interest from the underlying investments are either reinvested or paid out. Investors share in the gains of the unit trust - and the losses. Investors benefit in terms of dividend paid or capital growth.
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