Article Abstract:
The UK Office of Fair Trading (OFT) has rejected plans by the Personal Investment Authority (PIA) for rules governing the disclosure of charges by unit trusts. The OFT argues that investors would not easily be able to compare charges of life insurance products and unit trust products. Disclosure of unit trust charges was to have been implemented at the beginning of 1995, and looks unlikely to be implemented before the start of 1997. Investors may have difficulties in comparing unit trust charges due to different methods of charging.
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Article Abstract:
Unit trust charges in the UK will have to be disclosed in line with measures detailed by the Personal Investment Authority (PIA). The UK pensions and life insurance industries already have to make such disclosures. There could be misleading comparisons if a single standard growth measure is used for unit trusts as a whole since the objectives of funds vary and some focus on capital growth while others seek to provide high incomes. The value of the fund after periods of 12 and 36 months would also be useful information for investors.
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Article Abstract:
Timberlake and Company has carried out a study of fund fees and notes that other expenses are not always disclosed except in the form of footnotes available after the fund has been purchased. Yet these other expenses can double total fees in some cases. Investment trusts tend to be cheaper than offshore funds and unit trusts but this is truer of international general trusts rather than nore specialized investment trusts that tend to have fees closer to those of unit trusts.
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