Baring down on trust safety: just how safe are unit and investment trusts? Barings' colapse has revealed some unexpected risks - particularly for investors in offshore funds

Article Abstract:

Unit and investment trusts have been sold for their safety, however the Barings' collapse has exposed loopholes in regulatory controls on trusts. Two of Barings' investment trusts are facing possible losses and fund managers are reviewing the safety of their investments. Those unit trusts sold by UK companies are the safest option as assets are ring fenced and the trust is guarded by independent trustees. However trustess could appoint fund managers as custodians of those assets. There are now rules governing how investment trust risk are spread.

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A recipe for happiness using unit trusts: 'a large income is best recipe for happiness Ii every heard of,' asserted Fanny Price in Jane Austen's classic Mansfield Park. But where should investors start on the income trail

Article Abstract:

Planning an income is a priority requirment for many people, particularly those approaching retirement. Inflation needs to be kept under control if a realistic income is to be achieved, and equities are favoured as a defence against inflation. There is a large selection of UK equity income unit trusts, and the equity income sector outperformed all others in retail sales in 1994, according to the Association of Unit Trusts and Investment Funds (Autif).

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Trusts on the line: have the unit trusts we bought last year stood the test of time?

Article Abstract:

The Newton Income, Perpetual Growth Pep and Schroder Tokyo unit trusts have all achieved above average performance in their respective sectors, although there is a loss of 2,645 pounds sterling on the initial cost of the three trusts. The Newton Income fund is down 16% reflecting the general drop in the UK stock market, particularly the privatised utility shares.

Market share

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