Unit trusts in Singapore: Consistency of funds’ objectives

In order to cater to the different risks and return preferences of investors, various types of funds have been set up, which are usually classified in accordance with the stated objectives found in their prospectuses. This study examines the consistency (or inconsistency) of the local funds’ stated objectives with their actual risk and return characteristics. The findings obtained suggest that most of the funds have failed to deliver their promises and hence, investors are discouraged to place their reliance on these promises in selecting their investments.