Finding Value

The concept of valuing a unit trust fund is fundamentally different from valuing a company.  One fundamental difference is that the prevaling market price of shares are based upon the demand and supply of the shares whereas for unit trust fund, the demand (new investments) or redemption (withdrawal) does not affect the Net Asset Value (NAV) of the unit trust fund.  The NAV is valued based on the value of the underlying net assets adjusted for accrued management and trustee fee, the underlying assets being value of the companies held in the unit trust portfolio.

Thus whether a particular fund represent good value is based on the shares held in the portfolio.  It is the primary function  of the Fund Managers/Investment Managers to undertake necessary analysis and manage the portfolio by including stocks that will appreciate in value in accordance with the  funds investment objective.  Remember, the value of the unit trust will appreciate or depreciate based on the market value of the underlying shares on a daily basis.