What is a Unit Trust?
Unit trusts "offer people with limited time, or limited investment skills or reasonable means, access to investment returns usually available only to more sophisticated investors able to buy their own investment advice. They generally entail less risk than direct holdings of securities, and offer economies of scale."
-HM Treasury
What Unit Trusts do Artemis offer for investment?
Artemis has 10 Unit Trusts which you can invest in:
- Artemis Income Fund
- Artemis High Income Fund
- Artemis Capital Fund
- Artemis UK Growth Fund
- Artemis UK Smaller Companies Fund
What makes unit trusts attractive?
A unit trust enables investors to combine or "pool" their assets into a larger fund. The fund is set up under a trust deed and a Trustee then holds the assets in the fund and monitors the way in which the unit trust manager invests the fund. Investors select a fund with appropriate investment objectives but then leave the manager to invest across a wide range of eligible assets using his experience and the economies of scale that a pooled fund achieves. Investment into the fund is by the purchase of units from the manager. The price of the units is calculated regularly and is directly related to the value of the assets in the fund.
How do Unit Trusts work?
Like all investment funds, a unit trust enables individuals to pool their savings. A professional fund manager, whose experience offers investors a gateway to stock market expertise that would otherwise take years of experience to equal, buys shares or bonds that he believes will serve the objective of the trust and increase in value or produce an income.
Typically a unit trust will hold stocks and shares from between 50 and 150 companies or organisations. The fund is split into units and is priced at regular intervals, most often daily. Unit trusts have a dual pricing system, meaning that units are bought at a price called the offer price and sold at another called the bid price, mirroring the way that the underlying stocks are bought on the stock market. The difference between the two is called the spread. The offer price includes any buying charges within the fund.
Unit Trusts are open ended because there is no limit to the amount of units that can be issued and as more people buy into the fund, further units are created. This does not result in any dilution of value for existing holdings but does ensure that a sudden increase in demand can be counteracted and the cost of units maintained in line with the value of the underlying assets. The price simply rises and falls in line with the stocks and shares that make up the underlying assets.
How are units priced?
The value of your units is related directly to the value of the investments and cash held by the relevant fund. Each business day at the valuation point, buying and selling prices are calculated in accordance with the formulae laid down in the regulations governing unit trusts. At present funds are valued each business day at 12 noon.
Tax benefits
In addition to the financial expertise and acumen savers gain from professional fund managers, investing in a unit trust can also offer tax benefits. Stock movements within a unit trust's portfolio are exempt from Capital Gains Tax, though profits on the holding are not. However, Individual Savings Accounts (ISAs) offer people the chance to invest up to £7,000 per year in an equities investment fund tax-free. For further information on Artemis ISAs see our brochure and the ArtemisOnline section "What is an ISA?"
Artemis unit trusts
Artemis gives investors a choice of investing in unit trusts
in lump sums or through regular savings. Minimum amounts are
£1,000 and £50 per month(£50 per fund) respectively.
Because of the nature of the stock market, unit trusts should
be viewed as long-term investments and investors should aim
to hold them for three to five years at least.
Please read our Unit
Trust Key Features and Terms and Conditions document for
full details on Unit Trusts offered by Artemis before making
any investment decision.
How can I buy or sell units in the funds?
Lump Sum Investments
- You may apply to invest:
- a) by completing the relevant application form and returning it to the Artemis Fund Managers address on the form;
- b) through a Financial Adviser;
- c) by telephoning the Manager's Dealing Department
- d) through the Manage Your Account on this website.
Please read our Unit Trust Key Features for full details on Unit Trusts offered by Artemis before making any investment decision.
