Abrams
Ashton Financial Services Unit Trusts and OEIC's
Abrams Ashton Financial Services Unit Trusts and OEIC's
Many
people prefer collective investments such as unit trusts,
investment trusts and OEIC's unit linked and with profits.
In all cases an individual is able to invest in a basket of
shares of different companies, that way spreading his or her
equity investment risk.
In
the case of unit trusts and OEIC's the investor buys a unit,
or a part of a large fund which is itself invested in a variety
of companies. An investment trust is a company listed on the
stock exchange and whose business is investing in other companies.
In both cases the investor is trusting his or her money to
the judgement and skill of the fund manager.
Collectives
can also invest in fixed interest instruments.
These
include UK government stock, known as gilt edged stock or
"gilts" for short. Corporate bonds are also fixed
interest instruments and both represent direct borrowing on
the part of the issuer of the bonds. They are referred to
as "fixed interest" because their cost of borrowing
is fixed while the price of the bonds themselves may float
up or down depending on supply and demand. Traditionally fixed
interest investments have been regarded as a safe option.
But it is important to remember that not only do they fluctuate
in price but that the investor also risks that the issuer
may not pay the interest or coupon on the bonds and that it
may not repay the principal when the bonds mature.
Armed
with these explanations of what types of financial instruments
there are to choose from, investors can now seek the advice
of a financial adviser as to which ones the IFA recommends
as best suiting their risk and reward profile.
For
further information on Abrams Ashton Financial Services Unit
Trusts and OEIC's visit the Abrams Ashton Financial Services
website.
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