unit trust

(redirected from Unit Trusts)
Also found in: Dictionary, Thesaurus.

Unit trust

In the United Kingdom and other foreign markets, an open-end mutual fund.

Unit Trust

A British term for an open-ended mutual fund. See also: OEIC.

Unit trust.

The category of investment known as a mutual fund in the United States is called a unit trust in other parts of the world.

unit trust

a financial institution which specializes in investment in FINANCIAL SECURITIES on behalf of its ‘unit’ holders. Some unit trusts offer a single fund, but more usually they operate a number of funds catering for different investment requirements. Unit trusts pool together the monies of a large number of investors which they use to purchase a varied portfolio of investments, mainly UK and overseas corporate stocks and shares and government fixed-interest securities. They are ideal for smaller investors who wish to secure a wider spread of risk than they could achieve for themselves by direct investment in a limited number of securities, or who require professional management of their investments.

Unit trusts issue ‘units’ in their funds to buyers, and repurchase units from sellers on the basis of a bid price (lower, for buying) and an offer price (higher, for selling). An initial management charge is required of buyers, followed by a smaller annual charge. The value of the individual units in a fund is obtained by dividing the total value of the fund investments plus cash held, by the number of units in existence every day. A fund which is growing will need to create new units, while one in decline will liquidate units on redemption. The value of the total investments of a fund is determined by the value of the securities it holds and the fund's valuation, and hence unit prices can go up or down with the ebb and flow of STOCK MARKET prices in general. Unit trusts usually offer investors a variety of funds to choose from, ranging from general funds which aim at a balance between current income and capital growth, to those specialized in achieving either capital growth or high current income.

The unit trust movement in the UK is represented by the UNIT TRUST ASSOCIATION (UTA) which provides a forum for the discussion of matters of general concern to members, and acts on behalf of members in dealings with other institutional bodies such as the Institutional Investors Committee and the government. The investment and management of funds by unit trusts are regulated by the FINANCIAL SERVICES AUTHORITY in accordance with various standards of good practice laid down under the FINANCIAL SERVICES ACT 1906. See INSTITUTIONAL INVESTORS, FINANCIAL SYSTEM, INSURANCE COMPANY.

unit trust

a financial institution that specializes in investment in FINANCIAL SECURITIES on behalf of its unit holders. Some unit trusts offer a single ‘fund’, but more usually they operate a number of funds catering for different investment requirements (for example, high income, capital growth). Unit trusts pool together the monies of a large number of investors which they use to purchase a varied portfolio of investments, mainly UK and overseas corporate stocks and shares and government fixed-interest securities. They are ideal for smaller investors who wish to secure a wider spread of risk than they could achieve for themselves by direct investment in a limited number of securities, or who require professional management of their investments.

Unit trusts issue ‘units’ in their funds to buyers and repurchase units from sellers on the basis of a ‘bid’ price (lower, for buying) and an ‘offer’ price (higher, for selling). An initial management charge is required of buyers, followed by a smaller annual charge. The value of the individual units in a fund is obtained by dividing the total value of the fund investments plus cash held by the number of units in existence every day.

The unit trust movement in the UK is represented by the Unit Trust Association (UTA), while the investment and management of funds by unit trusts is regulated by the FINANCIAL SERVICES AUTHORITY in accordance with various standards of good practice laid down under the FINANCIAL SERVICES ACT 1986. See INSTITUTIONAL INVESTORS, FINANCIAL SYSTEM, PORTFOLIO, TRACKER FUND, INDIVIDUAL SAVINGS ACCOUNT.

References in periodicals archive ?
This acquisition will also see most of the investment management responsibility for MAAKL's unit trust funds transferred to Manulife Asset Management Services Berhad further complementing MAMSB's existing capabilities in world-class investment management.
A: There is no hard and fast rule that applies to all unit trust companies, so the only safe answer has to come from the company itself.
Your tax position will depend on the type of distribution you receive, which in turn will depend on the type of authorised unit trust or OEIC you invest in.
Therefore, there may still be a question mark over the long term viability of 'private' authorised unit trusts and OEICs.
Hence, only about 9% of investment trust ISA money comes through IFAs and only 5% of regular savings, whereas with unit trusts the figures are reversed.
Unit trusts have been marketed much more aggressively than investment trusts, with managers having pumped billions into advertising since the 1960s.
The number of companies that offer such funds is constantly growing and these can now be found in PEPs, unit trusts, insurance bonds, and even pensions.
One of the 14 offers he received was from First Investors and Savers unit trust company.
BOSTON -- State Street Corporation (NYSE: STT), one of the world's leading providers of financial services to institutional investors, announced today that it received strong results in two independent customer surveys: Global Custodian magazine's annual Global Custody survey and R & M's 2009 UK Unit Trust Trustee and OEIC Depositary survey.
He said Old Mutual Swaziland, through its arm, Old Mutual Unit Trust Swaziland (OMUTSWA) has re-introduced its Unit Trust product offering as a secure vehicle for individuals and businesses to invest in.
3 million form UK-based unit trust and OEIC (open-ended investment companies) ISAs during the month, the first time deposits have been negative for a year.
Unit trusts are not suitable for all investors so you need to ensure it meets your financial circumstances.