BANK AND INSURANCE YIELDS I have been examining recently the
records of different types of investments during the last few months of political disturbances, and some of the facts are very reassuring. On the whole equity shares come out well as compared with gilt-edged and fixed-interest stocks and, as I should have expected, bank and insurance shares, which combine many of the attributes of an equity with some of the steadying qualities of fixed-interest securities, have behaved excellently. Here are some illuminating figures based on the prices of three of the series of units managed by the Trust of Insurance Shares:
Price Price Current January 5th. April 4th. Price.
Bank Units ...
17s. 9d.
175. 175.
Insurance Units ... 205. 3d. 20S. 19s. 9d.
Bank-Insurance Units 18s. 9d. 18s. 17s. 9d.
Movements such as these in a six-months' period which has been punctuated by political alarms and excursions are very trifling and underline the merits of this type of investment in bad as well as in good times. One point about these units which I find has been puzzling some investors is their eligibility as security for bank loans. I should explain that most banks are satisfied with a plain endorsement (undated) on the back of the unit certificate, involving the unit holder in no expense. Other banks require a holder to sign a transfer in which case the only charge is the nominal stamp duty (los.) and the usual registration fee (2s. 6d.). I need scarcely point out that in view of the free market which the units enjoy and their stability of value they are readily accepted as collateral for loans on favourable terms.
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