With many investments, you buy the shares, bonds, property etc you are investing in. A Unit Trust is different. The Unit Trust owns the assets, and you buy "units" in the Trust. Each unit is an equal share in the Trust's "pool".

Your money in the Unit Trust is invested by fund managers ... then any money earned is put back into the Unit Trust, adjusting the size of the pool. So the value of your share in the pool adjusts to reflect daily earnings.

Every day the pool is valued and divided by the number of units. This sets the value for the buying and selling of your units.

It's true that the value of a unit can fall. Over time, though, units in managed funds have tended to rise in value. This makes Unit Trusts a good long term investment.