Unit Trusts Are Still News

By MAXWELL HERON

D6ttr trusts have certainly come into their own again, for since 1945, when approxi- mately £45 million was invested in this form of security, growth has been rapid, the sum rising to £70 million by April, 1958, and now exceeds £100 million. For the small investor this type of investment has many attractions and those who invested in unit trusts at the beginning of 1958 have seen some substantial appreciation in their holdings; in fact this rise (the present 'bull' market began in February, 1958) has outstripped the increase in the Financial Times industrial index. This index for the first six months of 1959 rose by 6 per cent., • whereas unit trusts can better this--as can be seen from the table (right). This is made up from one or two unit trusts from each of the well-known groups which have been established for sonic time, the newest being Unicorn in 1957 and British Shareholders and Crosby in 1958.

Naturally, the more. recently formed trusts have not yet had time to make the same rate of progress as their older competitors, for when they offered their units they were all heavily oveNubscribed and it is reasonable to suppose that the managers were not immediately able to invest all the funds at their disposal in an up- ward moving market. Last month AEG Group launched the Commonwealth Unit Trust, which was also heavily supported. All these successful issues go to prove their popularity; the man with a few hundred pounds to invest can pick the unit trust of his choice, so as to have a wide- spread interest in a large number of companies (often more than one hundred) and the bene-

fit of expert managers who are investing his money at a very low cost; in fact the charge is a slight addition to the ordinary scale of brokerage charges, which of course have to be paid in addition to the government 2 per cent. stamp duty, etc.. when the funds are invested through the market. This is coming to be recog- nised more and more by brokers.

The table shows the Bank Insurance Group leads the field with two of its units in first and second- place. These units are, of course, on 3 low-yield basis at present prices, but may well reward the long-term investor seeking growth of income and capital.

One of the most popular developments in the unit trust field is the organisation of savings schemes, whereby small sums may be paid in towards the purchase of units, and the income from them reinvested likewise. The first of these Thrift Plans was organised by M and G in 1954, and still remains the simplest and most econouli- cal scheme.

We have heard much about the formation Of a Unit Trusts Association, but at the time of going to press nothing concrete has emerged froin talks that have been going on amongst certain leading unit trusts. Such an organisation could do a great deal for its members in presenting it'

Unit trust

Offer price

Percentag increase

31.12.58

30.6.59

A.E.G. ... ... ... ... ... ... ... ... ... 11 /61 12/101 11.6 Allied Investors:

British Industrial IV ... ... ... ... ... ... 16/11 19/6 15.3 Metal and Minerals ... ... ... ... ... ... 12/114 14/91 14.1 Bank Insurance:

Insurance Units ... ... ... ... ... ... ... 34/3 42/3 23.4 Ccinsolbits ... ... ... ... ... ... ... ... 29/4i 9/-' 22.6 Unicorn ... .... ... ... ... ... ... 13/7 15/2k 12.0

First Provincial—Reserve 2nd. ... ... ... ...

36/104 10/6' ' 13.9.

Crosby... ... ... ... ... ... ... 10/4 11/3 8.9 British Shareholders ... ... ... ... ... ... ... 10/71 11/31 6.3 Municipal and General:

Midland Industrial ... ... ... ... ... ... 6/84 7/9 15.5 New British ... ... ... ... ... ... ... ... 27/61 30/92 11.8 National:

Domestic 2nd ... ... ... ... ... ... ... 11/3 13/- 15.6 Hundred 2nd ... ... ... ... ... ... ... 27/3 31/6 15.6 Selective 'C' ...... ... ... ... ... ... ... 17/74 19/101 12.8 Shield ... ... ... ... ... ... ... ... 10/-t _ 11/3 11.3

• units now split into 5/- units. t Price at 30.1.59

case to the Board of Trade and the Inland

1; Revenue departments on various points are known to be bones of contention at th present time. It could also help the investing Put', lit by setting up a code of conduct for manse. ment companies.

It has been announced this month that lb: Board of Trade is in the process of drawing UP new regulations for the operation of unit trusts' which no doubt will be welcomed. It will interesting to see, when this review appears 14%4 year. how the various units have fared and 110,., many newcomers have joined their ranks. " Financial Times industrial index has had a shale, rise since June 30, but I believe that appreciati°1 by the unit trusts generally is keeping ahead °'• this movement.

For those who believe in the future econonli progress of Great Britain, the unit trust doubtedly otters a stake with the widest posSib spread in this country's prosperity.