Standard Life Investments

Unit trusts

What are they?

A Unit Trust is a collective investment vehicle that pools your money with other investors.

A Unit Trust is created under a trust deed, as opposed to under company law in the case of an Open Ended Investment Company ("OEIC"), so when you invest money in a Unit Trust you purchase or sell units of the trust. As Unit Trusts are open-ended vehicles, the Unit Trust will issue (or redeem) units on a regular basis in response to investor demand. This will then increase or reduce the overall size of the fund accordingly.

The Unit Trust's value is directly linked to the performance of its underlying financial assets - when their value increases, your units grow in value too. Of course if these financial assets go down in value then so too does the value of your units.

As the Unit Trust pools money from a number of investors, this larger size allows the fund manager to invest in a far greater variety of financial assets (company shares, government or corporate debt or other types of financial investments in global markets) than would be available to an individual investor. Additionally, this greater size will allow for economies of scales in relation to the cost of investing in financial assets.

In recent years many Investment Managers (including Standard Life Investments) have converted their unit trusts into OEICs mainly for administrative and consistency reasons.

How do you invest?

Unit Trusts are easy to access either directly online from a fund provider or broker, or via a financial adviser. They can be held inside a tax-efficient wrapper such as an ISA or personal pension. Investors can also choose between lump sum and/or regular monthly payment into their Unit Trust.

Have a look at the unit trust funds we offer