Is unit trust a scam?
My parent bought $30,000 worth of blackrock BGF Global Multi-Asset Income Fund three years ago. First of all, they have to pay 5% Initial Charge. They lost $1500 from the start just by buying. Next is management fees of 1.5%. They never took out any dividends and re-invested back into the unit trust. At it's peak, they earn around $1500, 5% for 3 years. Due to market uncertainty, the unit trust NAV and they earn $900 over 3 years. That is merely 3% for 3 years!
@muhdhazmanmoh pointed out there is a sale charge of 5%. Buy and sell at 5%, that is freaking 10%! What a joke! Isn't unit trust suppose to be safe and targeting the retailers?
Managed to convince my parents to sell their holding over the weekends, let's hope there is no 5% sales charge! Time to buy some Singapore Saving Bonds instead. Though there is no upside, but at least no downside.
Update 1: seems like there is no sales charge, we shall see 1 week later.
Update 2: this charge cant run from it as it is from blackrock itself. dont think using those free platform will help.