I AM among the number of small investors here who have placed their money in unit trusts offered by local banks. We were told that upon maturity of our investments, our capital sum, at least, would be "protected".

We would never have expected the recent financial crisis in the United States to have such a serious impact upon our investments. On the news, it was stated that the effect of the crisis on Singapore banks was "insignificant".

One of my investments will be maturing next month, but I was told by a bank staff member that we would not get back all of our capital sum, which was placed with them as so-called "protected funds".

The amount we would be likely to get back could be 80 per cent or less than the capital sum.

In the bank's words, "protected" does not mean "guaranteed".

To laymen like me, it was certainly a bolt from the blue. If protected capital is not guaranteed, then the term "protected" is being misused for the purposes of luring those who are not well-versed in investing.

Perhaps the Monetary Authority of Singapore could help in ensuring that such financial terms are correctly used, so that ordinary people will not be misled into putting their hard-earned money into investments they do not know about.

In this case, shouldn't "protected funds" be called "non-guaranteed funds"?

Mr Soon Kim Hock

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