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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 MatchesFixed trustFixed trustA unit investment trust consisting of securities that were agreed upon at the time of investment and do not change. Sprinkling trustSprinkling trustA trust in which the trustee decides how to distribute trust income among a group of designated people. Antitrust lawsAntitrust lawsUS legislation to prevent monopolies and restraint of trade. Approved investment trustApproved investment trustAn investment trust which satisfies certain conditions set by the tax authorities and accordingly is exempt from tax on capital gains made on profits from sales of investments within its portfolio.This ability of investment trusts to trade in and out of shares gives them an advantage over private investors who, in considering whether to sell shares, are bound to have one eye on the capital gains tax liability that they might incur. D Declaration Of TrustD Declaration Of TrustA written acknowledgement by one holding legal title to property that the property is held in trust for the benefit of another. Further SuggestionsMunicipal Investment Trust (MIT)split capital investment trust Finite Life Real Estate Investment Trust (FREIT) Resolution Trust Corporation (RTC) Trustee In Bankruptcy Qualified plan or trust enterprise zone trust Unit investment trust Nondiscretionary trust Anti-trust policy Deed of trust Trust deed trust Trustor charitable trust Term trust Trust Indenture Act of 1939 Equipment Trust Certificate Antitrust laws trust deed Trustee Depository Trust Company Inter vivos trust All inclusive Trust Deed (wrap around mortgage) real estate investment trust |
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