Unit Trusts are a common type of collective investment.
A unit trust is a large fund of monies and/or investments pooled together and controlled by trustees with the aim of gaining capital appreciation, income, or both.
Unit Trusts are made up of 'units'. Each unit will have both a buying price and a selling price. The difference in these prices includes the fund management charges. The number of units held, multiplied by the current price, gives the current value of an investor's holding.
These investments are open ended, which means that units are created every time an investor puts money into the fund, and liquidated when they withdraw money, so that the fund can react to demand and continually grow through prosperous periods.
Investors can then enjoy the benefits of larger investments including discounts, however during periods of poorer performance, the fund may need to sell assets to enable investors to withdraw their monies, so the fund size is reduced.
THE VALUE OF INVESTMENTS AND THE INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED.
Investing in Unit Trusts
Unit Trusts are a common type of collective investment.
A unit trust is a large fund of monies and/or investments pooled together and controlled by trustees with the aim of gaining capital appreciation, income, or both.
Unit Trusts are made up of 'units'. Each unit will have both a buying price and a selling price. The difference in these prices includes the fund management charges. The number of units held, multiplied by the current price, gives the current value of an investor's holding.
These investments are open ended, which means that units are created every time an investor puts money into the fund, and liquidated when they withdraw money, so that the fund can react to demand and continually grow through prosperous periods.
Investors can then enjoy the benefits of larger investments including discounts, however during periods of poorer performance, the fund may need to sell assets to enable investors to withdraw their monies, so the fund size is reduced.
THE VALUE OF INVESTMENTS AND THE INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED.
Morley Fordham are Independent Financial Advisers. The levels, bases and reliefs of taxation are subject to change.
The guidance provided within the website is subject to the UK regulatory regime and is, therefore, primarily targeted at consumers based in the UK. This site does not confer any form of personalised financial advice, should you wish to receive specific financial advice please contact us.
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