Unit Trust Loan Financing Risk Disclosure Statement

Investing in a Unit Trust Fund with Borrowed Money is More Risky than investing with Your Own Savings

You should assess if loan financing is suitable for you in light of your objectives, attitude to risk and financial circumstances. You should be aware of the risks, which would include the following:
  1. The higher the margin of financing (that is, the amount of money you borrow for every Ringgit of your own money that you put in as deposit or down payment), the greater the potential for losses as well as gains.
  2. You should assess whether you have the ability to service the repayments on the proposed loan. If your loan is a variable rate loan, and if interest rates rise, your total repayment amount will be increased.
  3. If unit prices fall beyond a certain level, you may be asked to provide additional acceptable collateral or pay additional amounts on top of your normal installments. If you fail to comply within the time prescribed, your units may be sold to settle your loan.
  4. Returns on unit trusts are not guaranteed and may not be earned evenly over time. This means that there may be some years where returns are high and other years where losses are experienced. Whether you eventually realise a gain or loss may be affected by the timing of the sale of your units. The value of units may fall just when you want your money back even though the investment may have done well in the past.
The brief statement cannot disclose all the risks and other aspects of loan financing. You should therefore carefully study the terms and conditions before you decide to take a loan. If you are in doubt in respect of any aspect of this Risk Disclosure Statement or the terms of the loan financing, you should consult the institution offering the loan.

Compliance Team

Phillip Mutual Berhad strives at its best to ensure the company's compliance with the legal and regulatory requirements pursuant to the securities laws and other relevant laws in Malaysia and other industry's best practice.

Compliance/Risk Manager for PhillipCapital Malaysia

En. Ramli Abd Hamid
Head, Legal, Compliance & Risk Management
GL: 603 2783 0300 (ext. 341)
Fax: 603 2783 0399
Email: ramli@phillipcapital.com.my