COMPARED with some other investment products, putting money in unit trusts through a regular savings plan is a better, more flexible method of building up a nest egg.
Stewart Aldcroft, marketing and sales director for Templeton Franklin Investment Services (Asia), said: 'I don't think the average investor in Hong Kong has yet realised the excellence of the unit trust route to regular savings by comparison, particularly, to the use of insurance products.' The advantages of investing in unit trusts compared with investment products from insurance companies included the flexibility of unit trusts and their low and simple fee structure, Mr Aldcroft said.
'There is a massive difference in what you get back [from your investment in the two rival instruments] because the insurance product tends to be overloaded with charges and restrictions on frequency of redemptions or variations on what you are doing,' he said.
'Using a unit trust route you have a great deal more flexibility to vary, stop or top- up to your heart's content.' Mr Aldcroft said part of the reason for the lack of wide appreciation of regular unit trust savings plans among Hong Kong investors was a concentration on lump sum investment on the part of fund managers, banks and financial intermediaries.
The Templeton Regular Savings Plan is based on automatic withdrawals from the client's account. Clients can choose which Templeton Fund to invest in and the minimum initial investment is US$1,000 per fund, with a minimum monthly deposit of US$100. Once an investor decides to start paying into a regular savings plan, there is the critical choice of which fund to invest in.
Templeton encourages Regular Savings Plan investors to invest in its popular Global Growth Fund.