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Here's how you can tell if you've made money from your UITF

POSTED ON JUNE 10, 2019    

You’re about to embark on a mission to invest, but you need to understand a few acronyms.

Unit Investment Trust Funds (UITFs) are the fruit baskets of the investing world. (See explainer: What are UITFs?) You get a whole package for a clear price – the Net Asset Value Per Unit (NAVPU).

In any UITF, a fund manager picks investments like stocks, bonds, time deposits, among others. Think of them as the fruits inside the basket. The value of the whole basket depends on how much each fruit is worth.

In the same way, the value of a fund depends on the value of the investments inside. These investments are called assets because they’re expected to increase in value.

They don’t always increase in value together though. Like how fruit prices in the market tend to change, so do the value of assets. They could go up or down in value temporarily because of things happening in our economy.

The value of the whole fund needs to factor in these changes for each asset throughout the day. This grand total is called the Net Asset Value and it takes into account:

  • The value of all assets inside the fund (the basket)
  • How much the value of each asset changed throughout the day (the value of the fruits inside the basket)


How NAVPU affects you

In a UITF, you’re putting money in a fund together with other investors. This means you’re part-owner of the fund. How much you own is measured in units.

The value of each unit depends on the value of the fund itself.  If the fund grows then each unit should be worth more too. 

NAVPU is useful because funds are worth millions. Instead of tracking changes with very big numbers, you can instead just look at how the units are affected.

With the NAVPU, all you need to do is multiply it with how many units you own. Then you can see how much your investment in a UITF has grown.

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