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Independent financial advice - Unit Trusts

If you are looking for independent financial advice for investment purposes, you may want to consider the Unit Trust

What are unit trusts?

A unit trust is an investment fund shared by lots of different investors. It is an 'open-ended fund' which means the fund gets bigger as more people invest and gets smaller as people withdraw their money. The fund is divided into segments called 'units'. Investors take a stake in the fund by buying these units. The price of a unit is based on the value of the investments the trust has invested in so take independent financial advice to find the right unit trust to suit you.

History

The first unit trust was launched in the UK in 1931. The rationale behind the launch was to emulate the comparative robustness of US Mutual Funds through the 1929 Wall Street crash. The first trust called the 'First British Fixed Trust' held the shares of 24 leading companies in a fixed portfolio that was not changed for the fixed lifespan of 20 years. By 1939 there were around 100 trusts in the UK, managing funds in the region of £80 million.

Which unit trust is right for me?

When you take independent financial advice you will be offered a range of options:

  • Money market - invest in deposits. These are low risk but cannot be expected to give high returns over the long run.
  • Bond-based - invest in corporate bonds, gilts and/or similar stocks. Medium to low risk and usually aim at providing income rather than growth.
  • General - invest in a wide range of investments. They are suitable if you want a medium-risk investment. They can be aimed at providing income, growth or both. Good independent financial advice should inform you which is the most appropriate for your investments
  • Tracker - unlike the other funds listed here, there is no fund manager actively choosing and switching stocks. Instead, the investments are chosen to move in line with a selected stock market index - such as the FTSE 100. Because there's no active management, charges are usually lower.
  • Property - investing directly in commercial property.
  • Specialist - investing in particular sectors, such as Japan, or particular types of shares, such as small companies. Independent financial advice recommends that specialist funds are suitable only if you are comfortable with higher risk.
  • Ethical - these can be general or specialist funds, but some investments (for example, shares in defence companies) are excluded and others (say, shares in companies with good employment practices) are actively selected.

You can have a brighter financial future. If you would like independent financial advice about unit trusts call our experienced advisers today on 01424 777 156 or e-mail mike.robertson@mraltd.com