I was reading the ISO 10962 (the 2015 version) which classifies financial instruments.

In the Collective Invesment Vehicle (CIVs) they separe them in:

  • Standard Funds
  • Hedge Funds
  • REIT
  • ETF
  • Pension Funds
  • Fund of Funds
  • Private Equity Fund

In the fourth attribute of each one of that CIVs is "Security type and investors restrictions" and the possible values are:

  • Shares
  • Units

Question: What is the difference between both?


Mutual fund units, or shares, can typically be purchased or redeemed as needed at the fund's current net asset value (NAV) per share, which is sometimes expressed as NAVPS. A fund's NAV is derived by dividing the total value of the securities in the portfolio by the total amount of shares outstanding.

Open-end fund (wiki)

An open-end fund is equitably divided into shares which vary in price in direct proportion to the variation in value of the fund's net asset value. Each time money is invested, new shares or units are created to match the prevailing share price; each time shares are redeemed, the assets sold match the prevailing share price. In this way there is no supply or demand created for shares and they remain a direct reflection of the underlying assets.

Unit or share class (wiki)

Many collective investment vehicles split the fund into multiple classes of shares or units. The underlying assets of each class are effectively pooled for the purposes of investment management, but classes typically differ in the fees and expenses paid out of the fund's assets.


2 Answers 2


A share or stock is part of an individual company. Unit (Trusts) are a collection of different (and usually related) shares.

For example, I am currently investing in a Singapore Equity Fund. And this is known as a Unit Trust. And within the Singapore Equity Fund, my investment is made up of different company shares, e.g. the local bank shares, telecommunication company and some other companies.

And these Unit Trusts are usually managed by a Fund Manager who belong to a Fund Management Company (or known as Fund House). And there are many different Fund Management Companies in Singapore with their own expertise and knowledge.

Source: here

  • $\begingroup$ Thanks for your answer, could you read please my question again , I provided more context. $\endgroup$
    – rlartiga
    Jan 25, 2017 at 17:26

Typically a company will have shares with the features:

  • they come in integer amounts
  • they imply partial ownership of the company
  • an investor can often sell them to third parties without the involvement of the company except to register the transfer

and this also applies to companies whose sole assets are investments. In the UK Investment Trusts are typically structured this way.

Meanwhile a fund will typically have units (though these can be called something else) with the features

  • they may be fractional or integer
  • they may be created and cancelled easily by the manager as demand changes
  • they may not represent ownership of a company even if they may represent a claim on assets
  • they will typically be transacted between the investor and the manager rather than with third parties

In the UK Unit Trusts are typically structured this way.

Each has advantages and disadvantages, so there are mechanisms which try to combine features of each, such as Exchange Traded Funds which (as the name suggests) can easily be traded with third parties, but can also be created and cancelled easily by the manager as demand changes.


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