Page 2, 11th November 1938

11th November 1938
Page 2
Page 2, 11th November 1938 — Weakness of Investment Trusts
Close

Report an error

Noticed an error on this page?
If you've noticed an error in this article please click here to report it.

Tags


Share


Related articles

Has Taken Place Recently In Their Financial Positions.

Page 2 from 22nd January 1937

Further Phase Of Market Decline

Page 2 from 26th November 1937

1 Per Cent., Now Appear Reasonably Priced At Around £2.

Page 2 from 6th January 1939

Buying Unit Trusts

Page 9 from 1st May 1970

The City

Page 2 from 19th February 1937

Weakness of Investment Trusts

The advantages to be gained by sidetracking investment in stocks and shares through the medium of shares in investment trusts and " holding " companies, or in Fixed-Trust subunits, are apt to be exaggerated Those who favour this form of indirect investment do so on the ground that they participate in a widespread of sound securities, thereby avoiding the danger of putting their eggs in a limited number of baskets. This argument, however, is often somewhat weak. since one might just as well buy direct the best holdings of a trust, without participating in its worst.

Added to this, the dividend return obtainable from second-hand investment is necessarily less, as the dividends received by the trust are subject to the deduction of operating expenses and income-tax.

Although indirect investment is undoubtedly convenient for those who, from time to time. have small sums available to put aside. there is nothing to prevent anyone from creating their own investment units by the direct employment of round sums of £25, £50 or £100. Many people of small means are deterred from approaching the Stock Exchange for this purpose, because they believe that small sums are

not entertained. This is not so; a good broker is just as anxious to give attention to the investment of £25 as £1,000.




blog comments powered by Disqus