Trusting in a closed-end vehicle

Article Abstract:

UK investment trusts provide accounts and reports as do other public limited companies. They make profits from investments in shares of other firms. They are closed-end funds in contrast with unit trusts. The number of shares is fixed and investors have to purchase shares on the market or on the launch of a trust. These funds have greater autonomy over investment decisions than do open-ended funds. Prices for shares in these trusts is affected by demand rather than by the value of the trust's investment portfolio.

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Stock selection, once removed

Article Abstract:

Some United Kingdom funds invest in other funds rather than investing directly. Diversification reduces the risk of this type of investment vehicle. They also use information available to professionals and not always available to private investors. One disadvantage is double charging, which can increase costs by 1%. Active management may also be inhibited since charges would increase with many switches, though this does not apply if moves are made to other in-house investments.

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Changing lanes

Article Abstract:

United Kingdom share exchange plans allow investors to exchange stocks for stakes in investment trusts as a way of cutting dealing costs. Investors who have small amounts of privatisation stocks may consider these schemes. The UK stock market is volatile, and investment trusts can offer diversity, but there are variations for investment trusts in terms of risk levels. There are also higher charges for investment trusts held as part of individual savings accounts.

Personal Tax Planning, Taxation, Tax planning, Savings accounts

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