Unit trusts

Unit trusts are collective funds that allow private investors to pool their money into a single fund. This allows them to spread their risk over a wider range of asset types, pool together more expert advice and ensure economies of scale to reduce dealing costs.

Unit trusts are open ended in contrast to investment trusts which are closed funds. There are many factors to consider when investing in a unit trust such as the historical performance of the unit trust, the fees and commission charged. Perhaps the most important choice is to choose a unit trust with a successful fund manager at the helm.

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Investment trusts

Investment trusts are companies quoted on the London Stock Exchange whose sole purpose is to manage the investments they own.

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