Unit Trusts

An investor in a unit trust ‘buys’ a number of units, while an investor in an investment trust or ICV ‘buys’ shares.  Unit trusts are open-ended, which means that units can be issued as demand requires.  The price of these units is dependent on the value of the underlying assets, and they can be sold back to the fund managers by the investor.  Most UK collective investment schemes are authorised by the Financial Services Authority (FSA), although this imposes certain restrictions on what they can invest.