how unit trusts make money
the underlying value of the assets in a unit trust portfolio is directly stated by the number of units issued multiplied by the price per unit minus transaction fees management fees and associated costs in a unit trust the price of each unit is based on the fund s net asset value nav divided by the number of units outstanding unit trusts allow for new contributions and withdrawals to and from the pool when money is added to the trust more units are made to match the current unit buying price when units are withdrawn assets are sold to match the current unit selling price fund managers make money through the difference between buying price or offer price and the selling price or bid price the difference between the offer price and the bid price is called the bid offer spread and depends on the assets managed advantages and disadvantages of a unit trustas in all investments there are risks and benefits associated with a unit trust 1managed by a financial professionalone unit includes investments in a diversified portfoliono obligation or fixed investment term requiredperformance of the trust depends on the fund managermanagement feesprincipal investment is not guaranteed