In This Chapter
Understanding how to own lots of shares for little cash
Finding out about unit-trust charges
Sorting out active from passive unit-trust fund managers
Looking at ethical unit trusts
Differentiating investment trusts
Unit and investment trusts are the most important route for UK investors to buy a ready-made portfolio of shares or bonds backed by professional management. They’re called trusts because most are based on a legal document called a trust deed. Of course, the fact that trust also means confidence does no harm in making these investments more marketable. Together these trusts are known as collective investment.
So what do unit and investment trusts give you that you can’t do yourself? The best answer is that they offer a diversified selection of investments so you spread your risk. The only way that you could replicate this is if you were rich enough to invest meaningful amounts (and I’m talking £10,000 minimum here) into ...