Conference nyoss1::market_investing

	I invest in unit trusts for pensions and for savings, and mortgage 
	endowment.

	The company I have chosen to be with have a range of funds;

	International
	Japan
	American
	Money Markets
	UK Equity
	UK Small Companies
	Gilt-edged
	Index linked gilts
	Managed

	And a couple more I forget.

	The idea is they invest money in companies/gilts/money markets etc.
	You choose the fund(s) that you would like to buy units of, and you'd
	do this according to the risk you would like to take.
	The financial times holds a list of the companies, and their unit 
	trusts.

	You can invest in unit trusts via PEPS, these are a longer term 
	investment, but are tax free in growth and interest. The maximum is 
	6000 quid a year investment. These used to be risky when they were new,
	but are becoming a lot better now they've been out a while.
	I keep thinking the government will stop this at some time, because of 
	the tax advantages.	

	Have you thought about investing in builing societies TESSA's, and when
	they mature, then buy unit trusts?

	TESSAS you have to keep for 5 years, maximum 1,500 quid in the first 
	year, up to 5,000 quid.
	The interest is tax-free, and you can still get them about 8.5%.

	National savings do a 5-year comittment(6th issue), and you get 
	interest 3.5% above inflation...........all tax free. maximum 10,000 
	quid.
	(you missed this, I just got in the 5th issue at 4.5% above inflation)

	Or childrens bonds at 7.5% tax free (5 years again), I don't know
	the maximum.

	An independent financial advisor would be able to help.

	Heather

    The UK-ism "Gilt" means a UK Government bond.
    
    		-John Bishop

	If you're still looking, you should seriously consider UK Investment
	Trusts.  I'm not sure what the American equivelant is, I suppose
	Mutual Funds might be the closest. They are not quite the same as
	UK Unit trusts but like them, the investment is spread over many
	companies and Countries. But they have much lower charges than Unit
	Trusts and on average outperform them. 

	Some of these are very large and have been going for a long time.
	Foreign and Colonial the biggest has been going for over 120 years.
	It is a broad international trust with a very impressive growth record.
	Other Investment trust worth considering are Alliance and Murray Income.
	Pension funds invest heavily in them, not just individuals.

	Being a non-UK resident you don't qualify for the special tax exempt
	savings vehicles (PEP's and TESSAS). Your brother would, but he would
	have to waive his entitlement. To be honest PEPs are a bit of a hype.
	In many cases the charges often exceed the extra benefit.

	You could place your Nephews gift into a Building Society account
	which are the equivelant of your Savings and Loans. Being a non UK
	resident is an advantage in this case, as you would receive interest
	gross on your deposit. Typically 7.5% but variable. Our Govenment
	Bonds (Gilts) are currently paying 9 - 11%. But of course little or
	no growth.

	18 years is a long time and a lot can happen. But the large
	international Investment Trust do have a good record over that time.

	Hope this helps rather than confuse.


	Ferdy

Hello.

Are Unit Investment Trusts (UITs) the same in the the U.S. as in the U.K.?
I wasn't familiar with them until my mother's Merrill Lynch stock broker
called recommending that she sell two utility stocks she owns (PacifiCorp
and Pacific Enterprises) and instead put that money into a utility stock
fund.  He recommended two as a possibility:  one is an equity income fund,
Utility Common Stock Series #15, (June, 1992) that many of the full-sevice
brokerage houses sell.  The other possibility is the Colonial Utilities
Fund.  From the material he sent, it looks like the equity income fund is a
unit investment trust that invests in utility stocks and the Colonial fund,
a utilities stock mutual fund from the Colonial group in Boston.

Can anyone tell me the advantages of a unit investment trust of utility
stocks over a mutual fund of utility stocks?  I understand the cost to  get
into either of these is higher (4.5%), but my mother considers that (and so
do I) as the price of doing business with a full service broker.

I guess the advantages of the UIT is that the dividends are distributed
monthly.  Also, all of the utility stocks in the UIT have paid dividends
since 1947, and over the past 10 years, the stocks have a record of rising
dividends and dividends were never reduced.  He says that the utilities UIT
Series # 14 had a total return of around 16%. However, I understand that
the termination date of the trust can be as short as three years.  Does
that mean that when the trust expires my mother again has to reinvest that
money, paying another service charge or load?

Jane Bryant Quinn (in her recent book) is leery of UITs that invest in
bonds, but she didn't talk a lot about UITs that invest in stocks --
utility stocks specifically.  My mother's broker says that for an elderly,
conservative investor needing monthly income, my mother would do better
putting that portion of her money that is in those two poorly performing
utility stocks, Pacific Enterprises and Pacificorp, into a utility fund
(UIT or otherwise). 

So, other than the obvious reason of the cost of getting into a utilities
UIT, are there some other real disadvantages that someone selling that
investment might not mention?

Thanks!

Diana

    Stock UITs are a relatively rare bird.  They are probably not a great
    investment because of the commissions, but they probably aren't that
    much worse than the load mutual fund you could get from the same
    broker.  Frequency of dividend payments is a quality of the individual
    security, not the class.  You could probably find a utilities mutual
    fund that pays monthly.  You can certainly find them that roll over
    dividends and pay monthly withdrawals.  This is better because payments
    are more level and controlled but worse because the tax filing
    (Schedule D) is hell.
    
    A conservative investor probably is better off in some sort of mutual
    fund than holding a small number of stocks directly.  I would favor a
    more conventional mutual fund over a UIT just because they are more
    conventional.  Most UITs do have the "feature" that they return assets
    that must be rolled over and you face another commission.  But that's
    bond UITs... these may be different.  The major difference in most UITs
    is that they are "unmanaged" (they don't reselect their portfolios
    often) resulting in lower management expenses and - some think - better
    performance.  For utility stocks, I wouldn't think it would matter
    much.