A unit trust is a collective investment meaning that many people put their money into the one fund which then buys and sells shares and bonds on their behalf. By pooling money together to invest, there is less risk involved as it is spread over the number of people in the trust.
Investors who are looking to share the investment risk with other investors and those looking for tax benefits on their investment typically use this type of investment product.
Unit trusts are used to increase value of investments over the long term while maintaining a relatively safe level of risk investment as the risk is spread across everyone within the unit.
Pro: Relatively low fees and professional management
Con: Unsuitable for short term investments