Unit Trusts

These types of investments are a great starting point for people beginning to invest but can be a good option for experienced investors too.  They essentially involve investing in a fund which has been put together and managed by professionals alongside other people so the risk is spread and the costs are lower.

Unit trusts allow people to buy part of a larger fund.  These funds can be made up of a wide range of assets such as property, equities, etc. so individual investors don’t need to make decisions about which companies or shares they would like to invest in as this is done for them by professional fund managers.  Funds are then split into units and investors buy these units.  As the value of the funds rise (or fall), the value of the units rise (or fall) and investors can choose to take any profits as income or reinvest them into the fund (known as ‘accumulation’).

Investors can switch between income and accumulation but this can incur Capital Gains Tax as it involves buying and selling funds.  If you are interested in this type of investment, we can advise you on your best options taking all tax implications into consideration.  Similarly, we can talk you through all the associated risks and potential rewards of unit trusts to help you choose the most appropriate ones for your circumstances and what you would like to achieve with your investments.  As with all investments, the value of unit trusts are dependent on how the funds perform so the value can go down as well as up.  Professionally managed funds like these do everything they can to spread the risk to minimise the chance of a significant fall in value but the risk can never be totally mitigated.

Risk Warning: The value of units can fall as well as rise, and you may not get back all of your original investment & Tax planning advice is not regulated by the Financial Conduct Authority