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Unit trust |
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Unit trustUnit trusts are collective funds which allow private investors to pool their money in a single fund, thus spreading their risk, getting the benefit of professional fund management, and reducing their dealing costs.Features of unit trusts:They are open-ended which means that the trust can issue new units in response to demand. This means that unit trusts trade at their net asset value - that is the value of their underlying assets divided by the number of units in issue. Contrast this with investment trusts, which are closed funds. Their share prices are affected by market forces and often trade at a substantial discount to net asset value.Different trusts have different investment objectives. Some invest for income, some for growth. Some invest in small companies, some in large. Some invest in the UK, some in other territories. As an investor you can choose the trust that matches your interest and objectives.Investment decisions are made by professional fund managers appointed by the trustees. These managers make annual charges.Every day the trustees compute the value of the trust, divide it by the number of units in issue, and produce a bid and offer price based on that calculation. Unfortunately, when you invest in a unit trust, you usually never know the price you will be charged for units until the next valuation point, typically midday the following day.Unit trusts are well suited to regular savers who want to drip-feed money into the market every month. With unit trusts, you can invest as little as £50 per month, averaging the acquisition cost of your shares over many months.Many unit trusts make an initial charge when you invest, and their management charges are deducted from fund income.Unit trustIn the United Kingdom and other foreign markets, an open-end mutual fund.Unit trust 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. Fixed trustFixed trustA unit investment trust consisting of securities that were agreed upon at the time of investment and do not change. Nondiscretionary trustNondiscretionary trustA personal trust whose trustee has no discretion in deciding how income will be distributed to the beneficiary. Sprinkling trustSprinkling trustA trust in which the trustee decides how to distribute trust income among a group of designated people. TrusteeTrusteeAgent of a bond issuer who handles the administrative aspects of a loan and ensures that the borrower complies with the terms of the bond indenture. Further SuggestionsAntitrust lawsTrust All inclusive Trust Deed (wrap around mortgage) accumulation and maintenance trust Association of Investment Trust Companies Irrevocable trust Bank trust department Revisionary trust Collateral trust bonds Equipment trust certificates Trust fund transaction Municipal Investment Trust (MIT) trust deed enterprise zone trust trustee D Declaration Of Trust Association of Unit Trusts and Investment Funds Trustee guaranteed trust Inter vivos trust Personal trust Trust Indenture Act of 1939 trust Finite Life Real Estate Investment Trust (FREIT) investment trust |
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