Chapter 13

Investing with a Trust

In This Chapter

arrow Understanding how to own lots of shares for little cash

arrow Finding out about unit-trust charges

arrow Sorting out active from passive unit-trust fund managers

arrow Looking at ethical unit trusts

arrow 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 ...

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