Article Abstract:
Hybrid trusts combine some characteristics of both investment trusts and unit trusts, and are popular in the US. They could appear in the United Kingdom in 1998. One difference between investment trusts and unit trusts is in the way that investors exit, and the difference between stock prices and net asset value for investment trusts. Hybrids are likely to give greater choice for investors seeking exposure to exotic markets, but they will not be appropriate for investors needing to raise funds at short notice.
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Article Abstract:
Index tracker funds have become increasingly popular because they are simple, cheap and their performance is easy to follow because news on indices is easily available. There are drawbacks to these funds, for example they will drop in value if stock prices as a whole fall, and stocks included in indices will rise in price regardless of their ratings simply because they have to be purchased by tracker fund managers. Investors should assess the index tracked, the level of tracking error, and charges.
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Article Abstract:
UK investment trusts are becoming increasingly popular as a way of obtaining an income. Large general trusts are appropriate for personal investors and can provide a sustained growth in income, while many new issues may not be appropriate. Sophisticated investors can spread risks by building up customized portfolios. Personal equities plans (Peps) are useful for investors paying a higher rate of tax, and for investors who have used all their allowance for capital gains tax.
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