22 OCTOBER 1937, Page 55

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UNIT TRUST STRENGTH Stockbrokers should take off their hats to investors in the unit trusts. In the search for whipping posts Throgmorton Street has been far too ready to name the unit trusts as among the main sources of weakness in the recent market decline. As might have been anticipated, those investors who hold sub-units in the various fixed and flexible trusts have refused to panic and relied, perhaps over-optimistically, on the " stability through spread " argument to limit the depreciation of their holdings. The sub-units have, of course, declined in value, as is inevitable in a movement of the magnitude of the slump of the last few weeks, but there has been virtually no selling.

On-the contrary, the figures published by the trusts demon- strate conclusively that the trusts, so far from having induced or even accelerated the downtrend of prices, have actually provided some support, for new purchases of sub-units by the investing public have greatly exceeded sales. As a medium through which to acquire a well-spread portfolio of industrial ordinary shares, most of the trusts provide a satisfactory investment. As soon as it is time to buy equity shares again,

I would not advise against a purchase of unit trust sub-units for income and reasonable safety of capital.