On 9 October 2006 Securities Commission announce the initiatives to accelerate growth and enhance investor protection in the unit trust industry. One of the initiatives are single pricing. below is an excerpt from the newspaper announcement:
A single pricing regime will be introduced at the beginning of the second quarter 2007 to ensure there is full transparency and disclosure of up-front costs. Unlike the current dual pricing regime where prices are quoted inclusive of charges, under the single pricing arrangements, prices will reflect the net asset value of a unit and all charges will be separately disclosed. The enhanced transparency of prices and charges will allow investors to compare the costs of investing in unit trusts associated with different channels of distribution and should lead to a more competitive cost environment.
So with this new ruling how many units will you get and how much shall you pay for your investment?
Below is an example of how the calculation is done when the fund NAV per unit is RM0.2500.
Units credited to your account: = Amount invested /NAV per unit
= RM10,000/RM0.2500
= 40,000 units
Service charge per unit :
= NAV per unit x Service Charge (%)
= RM0.2500 x 5.45%
= RM0.013625
Total service charge incurred:
= Service Charge per unit x Units credited to investor
= RM0.013625 x 40,000 units
= RM545
Following the above, the total amount you should pay will be:
= Amount invested in PIABF + Service charge incurred
= RM10,000 + RM545
= RM10,545
