Which is better ETFs or unit trust funds?

Will i be able to get back more returns from etfs or unit trust funds from AIA (for eg)? as far as i know, unit trust funds will take some of my money because of commission. so is it still as worthy. im rly lost HAHAH but if i trust a FA from AIA they're sure to promote their products n etc so idk if their suggestion is rly for my benefit or theirs

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Chris

28 Mar 2021

Owner and Writer at Tortoisemoney.com

It's not quite so simple to say unit trusts will generate higher returns or ETFs will generate higher returns. No one can predict the future.

However, that being said, it is true that in general, Unit trusts do incur significantly higher costs compared to ETFs (especially index ETFs). Unit trusts usually have expense ratios of 1% and this doesn't include the cost involved in buying or selling them, whereas ETFs can have expense ratios of under 0.2% for most index ETFs and even for actively managed ones like ARKK I believe it's still less than 1%.

There are of course, good unit trusts and good ETFs, and unit trusts that outperform ETFs but ultimately, these are just investment vehicles, what really matters is the underlying companies in each one.

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