1) Investment Strategy, policy and holdings.

Every fund has its own investment profile. Investors should have a clear understanding of the investment strategy taken in each fund that they are considering to ensure it is consistent with their personal investment objective and risk tolerence level. Even the funds within the same category may have significat difference in the investment holdings. For example, the risk exposure in large-cap growth companies is definitely much lower than for penny stock funds.

2) Past performance.

Investors may look into the past performance trend of the fund to gauge its future performance. Do bear in mind that the past performance may not repeated in the future and we should no be overly excited to see one year of good result if the fund is only newly established. A good fund should be the one that has been consistently out-performing it peers, be it during good and bad times.

3) Cost.

Investors must aware that when they buy or sell the funds, there are fees and expenses embedded in every transaction. For example, the expense ratio of a small funds tend to be higher than a large fund while a regional or global fund usually will carry higher cost compared with domestic fund.

4) Fund Management

The Fund management is very important to ensure continuity and consistent performance. If a fund changes management too frequently, it very difficult for us to gauge the performance of the fund as different managers will have different styles wich may effect the performance of the fund.

Example : If the manager tend to have higher portfolio turnover, then the expense rati of the fund may increase even tough the nature of the fund holdings remains the same.

Hopefully by having better understanding of the above, you may able to make meaningfull comparison among unit trust fund that you interested and identified ones that suit you most

Happy Investing :wink: 

1) Income Funds - usually are characterised as providing consistent income to investors. These Funds invests in income-producing stocks or bonds or combination of both. Bond funds, equity funds and money market funds are included into this category.

2) Growth funds - generally are more aggresive than income funds but have the possibility or earning higher returns by focusing on the objective of long-term capital appreciation rather than income producing or short - term gain. Example small caps funds, commodity funds, index funds and gold funds.

Before you start evaluate these type of funds there are 2 things you must considered :

1. your investment goal or objective.
2. risk level that you afford to take.

Certain investors invest for his own purpose, some invest for retirement and if you are already close to it than u should look at income funds that are more predictable. However if you are still younger (like me ) and you maybe married and want to save for your children which will be 10 or 15 more years you may look for growth funds that generate higher return but with higher level of risk.

Once you are clear on what you are looking than you can narrow down your selection to either income or growth category and you can move the next step of identifiying the most suitable funds within selected category.

Happy investings