Understanding Unit Trust Pricing and Fees in Singapore
Learn how unit trust prices are based on NAV, how subscription and redemption charges work, and what management fees to expect for active and passive funds in Singapore.
How Unit Prices Are Determined
The price of each unit in a unit trust is based on the fund’s Net Asset Value (NAV). Specifically, the unit price is calculated by dividing the fund’s NAV by the number of units outstanding.
Subscription and Redemption Charges
Under the “bid and offer pricing” method, the subscription charge is added to the NAV per unit when you buy, while the redemption charge is deducted from the NAV per unit when you sell.
Understanding Management Fees
Management fees vary by fund type. Actively managed funds typically charge management fees ranging from 1.0% to 2.0% per annum of the fund’s NAV. Passively managed funds generally charge management fees below 1%.
What to Do Before Investing
Before investing in a unit trust in Singapore, it’s important to understand NAV pricing, fund costs, and associated risks.