How to Calculate Unit Trust Performance

How to Calculate Unit Trust Performance
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A unit investment trust or a UIT is a trust that incorporates the savings of a large number of investors. The fund manager invests the savings into different types of investments, including stocks, bonds, and other liquid assets. The unit trust is much like a mutual fund in this sense. After the costs of management, which include management expenses and salaries, the unit holders are paid out a proportionate amount of the return on the investment.

Review the definition of asset performance. Return for any investment asset is calculated by looking at the profit (or loss) made on the investment divided by the cost of the investment.

Unit trust performance is gross profit (or loss); that is, the total Redemption Value minus the Capital Invested. These are both line items that should be listed on your account statement or in the prospectus sent to you by the company if you have already invested in the UIT. If you haven't, contact the fund manager and request a prospectus. A prospectus is the equivalent to an annual report for UITs. Let's say the total Redemption Value is $1 million and the Capital Invested is $750k.

Subtract the Capital Invested from the Redemption Value, this is the gross profit. In our example the answer is: $1 million - $750k = $250k.

Divide the gross profit by the Capital Invested. This equals $250/$750 or .33. This is the return or performance value.

Multiply the performance value by 100 for the performance percentage. This equals 33 percent (.33 x 100).