Which of the following statements is NOT a factor listed as affecting the number of units allocated monthly in a unit-linked plan?

• A. Exit tax is deducted from plan value in some months but not in others.
• B. The Bid/Offer spread changes month to month.
• C. The unit price fluctuates month to month.
• D. The number of investors in the Fund fluctuates.

Answer: (D)

In a unit-linked plan, the number of units you receive in a given month is determined by how much you invest and the price per unit at the time of purchase. The math is simple: units allocated = amount invested divided by the unit price. So anything that changes either the amount you actually invest (after charges or taxes) or the unit price will change the number of units you get.

Exit tax being deducted from plan value can reduce the net amount available to buy units, or reduce the value on which the unit allocation is based, thereby affecting how many units you receive. The Bid/Offer spread affects the price you pay for units in that transaction, so a wider spread can alter the unit count. The unit price itself fluctuates month to month due to fund performance and market movements, directly changing the units allotted for the same investment amount.

The number of investors in the fund fluctuating does not affect your personal unit allocation. Your units depend on your own investment amount and the unit price at purchase, not on how many other investors are in the fund.