Unit trusts & OEICs

Unit trusts & OEICs offer investors exposure to a range of asset classes and markets, especially equities, where returns have historically outpaced inflation and deposit accounts over the medium to long-term.

They spread risk via the large number of holdings within the fund, by statute the minimum is 16. Most funds tend to hold between 60 to 100, with some 'focus' funds holding between 20 to 50.

They also deliver superior 'stock picking' ability through in-house expertise and analysis, allowing Allenbridge to combine the best talent from a selection of asset management houses to blend a 'Best of Breed' portfolio.

These pooled investments also reduce the cost of entry into the underlying assets through bulk buying. Allenbridge can offer significant discounts on initial fees and annual management charges as one of the UK's largest discount brokers.

Prices are based on the value of underlying assets and are calculated daily.

Funds can be bought or sold daily, with prices available publicly.

They can be invested within tax efficient wrappers such as ISAs and SIPPs, and holdings within the fund do not incur Capital Gains Tax (CGT) on disposal by the fund manager.

Investment Trusts

Investment trusts have similar characteristics to the above as pooled investment vehicles offering economy of scale for investors, but displaying some important differences.

You can invest in a wider range of assets than unit trusts and have more flexibility to invest in less liquid securities and markets. This makes investment trusts an ideal conduit to Venture Capital/Private Equity and Emerging Markets for sophisticated investors.

Investment trusts can also apply leverage (gear) to magnify returns through bank borrowing or by issuing different share classes.

The investment trust share price may trade at a discount or premium to the value of the underlying investments due to supply and demand and does not therefore directly reflect the value of the underlying assets ('Net Asset Value').