STEPHEN CRANSTON: Unit trusts not perfect, but there are worse in an unstable world
It’s advised that investors pick portfolios for five years or longer that match their risk profile
I have always favoured unit trusts over life-wrapped investments. I particularly hated the dominant product at the beginning of my career, universal life. This bundled life cover with investment. There was zero transparency and inevitably disappointing returns at the end of the five-or 10-year term. Unit trusts don’t have a term and they disclose both their fees and their underlying portfolios. Not that they have been immune to some manipulation of their own. There was a ridiculous initial fee of nearly 6% and an equally unjustifiable compulsory charge for dealing costs — probably one of the world’s most generous bid/offers. One area in which unit trusts are behind life companies is they do not break down sales between single and recurring premium sales (they would call them lump sum and debit order). Somewhat disingenuously, unit trust managers argue that there is no such thing as a recurring premium unit trust payment, they all count as single premiums.But surely there is a record...
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