From: neil@invidion.co.uk
Newsgroups: uk.finance
Subject: Re: Are Unit Trusts quoted / listed on Exchanges?
Date: 27 Jun 2006 00:37:40 -0700
   posting-account=f0YIrg0AAAARxP4nJijkyA_2eBXCEEJZ

Another point to remeber is that Unit Trusts (and OEICs) are
'open-ended', which means that an infinite amount of units can be
created (and cancelled). Therefore, the value of a unit is calculated
by dividing the assets of the Trust by the number of units in
circulation. (well, in principle - it is slightly more convoluted than
this).

Investment Trusts (which are quoted on the stock-exchange) are
'closed-ended', which means that there are a limited number of shares
in circulation. Therefore, the value of each share not only reflects
the underlying value of the assets, but also the demand for the
Investment Trust shares themselves - hence they trade at a 'discount'
or 'premium', depending upon demand for the shares.

Have a look on Trustnet, (www.trustnet.com), as there are guides which
explain these concepts in easy terms.

Neil.


Terry Harper wrote:
> On 26 Jun 2006 12:17:53 -0700, Markus.Thimas@yahoo.com wrote:
>
> >I have been trying to understand how do they work. Say if it is a
> >property type unit trust, is it going to be affected by how the stock
> >market is performing (supply - demand principle).
>
> A property unit trust is going to reflect the market in which it
> invests, be that the stock market for commercial property shares, or
> the property market for bricks and mortar property. Valuations of
> property may be made infrequently. I've known of a property fund which
> was valued monthly.
>
> Most unit trusts are valued every working day by taking the values of
> the underlying investments as quoted on the stock market. This is
> normally done at noon, and is the price used for transactions carried
> out that day, which have to be ordered before the valuation time. This
> is known as "forward pricing".
> -- 
> Terry Harper
> URL: http://www.btinternet.com/~terry.harper/