Abstracts » Business

Investment trusts offer choice

Article Abstract:

UK investment trusts are becoming increasingly popular as a way of obtaining an income. Large general trusts are appropriate for personal investors and can provide a sustained growth in income, while many new issues may not be appropriate. Sophisticated investors can spread risks by building up customized portfolios. Personal equities plans (Peps) are useful for investors paying a higher rate of tax, and for investors who have used all their allowance for capital gains tax.

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A new investment product

Article Abstract:

Open-ended investment companies (OEICs) will be launched in the UK from mid-1996. There will be just one price for selling and buying shares in OEICs. This is in contrast to unit trusts, which offer different prices. OEICs will have a designate corporate director, or DCD rather than a manager, as is the case with unit trusts. Investors will hold shares in the OEIC, whereas investors in unit trusts hold units. The tax regime will be similar for both OEICs and unit trusts.

Laws, regulations and rules, Financial services industry, Financial services

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Investment trusts going cheap

Article Abstract:

Investors may consider buying trusts at a large discount because they appear to be a good bargain. They should assess the reason why the trust is trading at such a discount. There is a gamble involved in buying such trusts and there may be particular problems which lie behind the discount. Trusts with complicated structures such as split capital trusts may have misleading discounts that lead investors to overestimate how cheap the shares are.

Personal finance

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