Stocks vs Unit Trusts - Is there a
one-size-fits-all solution?

by  Jean Chan | 15 October 2025 | 5 min read

Stocks vs Unit Trusts

Key Takeaways at a Glance

  • Stocks offer control and upside but require time, skill, and risk tolerance.
  • Unit trusts provide built-in diversification with professional oversight.
  • The right approach depends on how involved you want to be and what you want to achieve.
  • Many wealth portfolios blend both to manage risk and opportunity.
  • Citi’s insights and tools make diversified execution easy.

Introduction

A common question among investors—whether new or seasoned—is this: should I invest in stocks or unit trusts? Both instruments can play a valuable role in building and diversifying wealth, but the right choice depends entirely on your individual investment style, risk appetite, and long-term goals.

In this article we break down the key differences between stocks and unit trusts and explore how investors with different profiles can pick a strategy that aligns best with their wealth-building goals. In future articles, we’ll take a deeper look at thematic investing, evaluating active vs. passive fund styles, and strategies for balancing direct equities with managed exposures.

What are the key differences between stocks and unit trusts?

Investing in stocks means owning shares of individual companies. You decide what to buy, when to sell, and how to manage the position. This offers greater flexibility, potential upside, and the ability to act fast—but it also demands time, market knowledge, and a willingness to accept short-term volatility.

With unit trusts, your capital is pooled with others and managed by a professional fund manager. You gain instant diversification, access to a broader set of opportunities (including global ones), and less day-to-day management by individual investors. In return, you’ll typically pay a management fee and forgo individual control.

To summarize: the core difference lies in control vs. convenience.

Comparison Point Stocks Unit Trusts
Control High – self-directed Low – fund manager controlled
Cost Low per-trade cost Management & platform fees
Diversification Depends on spread Automatically diversified
Flexibility Buy/sell anytime Multiple trades can be placed but are executed at the next available daily valuation
Expertise Needed High – ongoing monitoring Low – guided by fund managers
Ideal for Active investors Passive or strategic investors

 

 The Citi Advantage

Use the Citi Mobile® App to track both stock and fund performance, compare costs, and access insights that inform smarter investment decisions.

Which is better for your investment style and goals?

The right fit depends on who you are as an investor:

  • If you enjoy researching companies, have the time to monitor markets, and are comfortable with risk—you may lean toward stocks
  • If you prefer a more passive, goal-driven approach—or are investing for capital preservation or stable growth—a unit trust may better serve your needs
  • If you're just starting out, unit trusts provide a solid foundation with professional management and diversification built in
  • If you’re in a high-growth phase and have a longer time horizon, equities may provide more upside—but with more effort and risk
  • Ultimately, your risk tolerance, involvement preference, and investment horizon should guide your asset mix.
 The Citi Advantage

Your Client Advisors will use a structured discovery process to map your investment personality to appropriate instruments including stocks and unit trusts—whether you're growth-driven, income-focused, or balanced.

Can stocks and unit trusts work together in one portfolio?

Absolutely—and for many High Net Worth investors, they should.

A diversified portfolio often blends direct equity exposure for upside and unit trusts for stability and breadth. You might use stocks for tactical plays and unit trusts to anchor long-term allocations.

This approach not only spreads risk but also introduces different layers of strategy—active vs managed, short vs. long term, thematic vs. diversified.

 The Citi Advantage

The Citi Mobile® App allows you to monitor all holdings in one place, analyze overlaps, and access guidance that helps you build synergy between stock positions and fund exposures.

How can Citi help you make the right call?

Citi combines expert advisory with intelligent digital tools to help you navigate both worlds. Whether you’re trading equities or exploring unit trusts, Citi provides real-time visibility, curated opportunities, and a dedicated Client Advisor, trained via the Citi | Wharton Global Wealth Institute, who understands how to bring all the pieces together.

What’s the best approach for long-term diversification?

There’s no one-size-fits-all solution—and that’s exactly the point.

The most effective portfolios are built around you: your goals, your mindset, and your financial vision. For some, that means active equity positions. For others, well-constructed unit trust allocations. And for many, it’s a carefully weighted combination of both.

 Jean Chan | Traditional and Portfolio Specialist, Citi Wealth

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