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Bare trust |
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Bare trustA trust which allows parents to give capital to a child and have the income from that capital treated as the child's rather than their own. This can save tax by using the child's personal income tax allowance.Similar MatchesUnit investment trustUnit investment trustMoney invested in a portfolio whose composition is fixed for the life of the fund. Shares in a unit trust are called redeemable trust certificates, and they are sold at a premium to net asset value. Depository Trust CompanyDepository Trust CompanyIn the US, the Depository Trust Company (DTC) is a national clearing house for the settlement of trade in corporate and municipal securities and performs securities custody-related services for its participating banks and broker-dealers. DTC is owned by members of the financial industry and by their representatives who are its users. DTC is 35.1% owned by the New York Stock Exchange on behalf of the Exchange's members. It is operated by a separate management and has an independent board of directors. It is a limited purpose trust company and is a member of the Federal Reserve. Investment trustInvestment trustA company quoted on the London Stock Exchange which invests its shareholders' funds in the shares of other companies.Points to note about investment trusts are:They enable private investors with limited funds to get diversified share ownership and without incurring heavy dealing costs.They enable investors to get exposure to markets that they may not be able to reach themselves (e.g. to emerging countries). Different trusts also have differing objectives (e.g. growth or income).They enable investors who don't have the skill or inclination to invest directly in companies to get the advantage of professional fund management (although see point below 6)It is easy for investors to drip-feed money into investment trusts over time by using a monthly savings plans.Unlike unit trusts, investment trusts are closed end funds. That is, there is a fixed number of shares in circulation, and the price of those shares is determined like other quoted shares - by supply and demand. This means that IT shares often trade at a discount to their Net Asset value (i.e. the value of their underlying investments) and it also makes IT shares more volatile than unit trust prices.ITs are actively managed funds which try to produce total returns better than the market average. However once management charges are taken into account, they often fail to meet this target. Hence the move by many investors to passive funds - trackers and index funds - which have lower charges. Unit trustUnit trustIn the United Kingdom and other foreign markets, an open-end mutual fund. Trust deedTrust deedA trust deed is a legal document for setting up a trust. In order for a unit trust to be authorised by the FSA, the trustees and fund managers must submit a draft trust deed and scheme particulars. The fund may only be promoted to the public once authorisation has been obtained.The trust deed has certain mandatory content:It must contain the category and the name of the trust, which must reflect its objectives.It must state the law that applies to the trust (e.g. England and Wales).It must state the currency of the trust (e.g. sterling).It must contain a general statement that the scheme may invest in certain eligible markets.It must state that the trust deed is binding on the unitholders, trustees and managers and that the trust property is held by the trustees for the unitholders.It must state that unitholders have no further liabilities once they have paid the purchase price of the units.Other optional detail includes any restricted investment powers or geographic limitations, charges, unit pricing formulas, the remuneration of trustees, auditing arrangements, the creation of a unitholders' register etc. Further SuggestionsDeed Of Trustunit trust Trust receipt charitable trust Finite Life Real Estate Investment Trust (FREIT) approved investment trust Trustee Revisionary trust Anti-trust policy Inter vivos trust Municipal Investment Trust (MIT) Marital trust Trust fund transaction Trust company accumulation and maintenance trust trustee Nondiscretionary trust Discretionary trust Trust Indenture Act of 1939 Term trust Association of Unit Trusts and Investment Funds Trustee Antitrust laws Trustor Voting trust certificate |
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