Unit =?iso-8859-1?Q?trust=3F?=

[Keith Refson]

Jean-David Beyer <jdbeyer@exit109.com> writes
> Dave Peticolas wrote:
> >
> > 
> > 'Unit trust' is the en_GB translation of 'mutual fund'.
> > 
> The terms are both used in the US, and are slightly different
> things. 

And unfortunately almost the reverse of the meaning in the UK.  We do
not have term equivalent to "mutual fund".  The three main types
available here are

1.  Unit trust.  This is an open ended collective fund which may
    invest in shares (stocks), property or corporate bonds, and
    probably other obscure things too. Equity (stocks) unit trusts are
    the most common.  It is therefore not quite the same thing as a US
    unit trust.

2.  OIEC (open-ended investment company).  The main difference between
    this and a unit trust is that OIECs have a single buying and
    selling price and do not have a bid-offer spread as unit trusts
    do..

3.  Investment trusts.  These are closed-ended investment companies,
    which invest in other equities and possibly other investments.
    The main difference between and investment trust and a unit trust
    or OIEC is that it is a company quoted on the stock exchange, and
    it is bought and sold through a broker like any other share.  It's
    price is therefore determined by the market, and it may trade at a
    discount or a premium to the net asset value of its investments.

>From the Gnucash perspective, Unit trusts and OIECs are best suited to
the US "Mutual Fund" category, which is why I suggested "unit trust"
as the en_GB translation of "mutual fund" (Yes, it's my fault!).
Investment trusts can be treated exactly as the ordinary shares they
are and put into a share account, or a "mutual fund" account as
convenient.  (I can't recall what the difference between these
categories is for the moment!).

Keith Refson

-- 
Dr Keith Refson,        "Paradigm is a word too often used by those who would
Dept of Earth Sciences      like to have a new idea but cannot think of one." 
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Oxford OX1 3PR, UK        
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