Unit Trusts

thrupence

Can Unit Trusts go bust and if so what are the circumstances in which this might happen?

Can an individual fund go bust when the company that manages them is sound, and what would happen if Neptune or Jupiter or something went bust.

Aegis

Unit trusts aren't companies, so they can't go bust in the usual sense of the word. I imagine that the investment companies in charge of those unit trusts can decide to close down the trust, at which point they presumably sell all the assets, distribute the resulting cash to the unit holders accordingly, and then move on.

I don't doubt that it's somewhat more complicated than that, but maybe one of the locals with a bit more knowledge can expand further without ruining our brains?

pumpndump

thrupence wrote: »

Can Unit Trusts go bust and if so what are the circumstances in which this might happen?

Can an individual fund go bust when the company that manages them is sound, and what would happen if Neptune or Jupiter or something went bust.

In theory a unit trust can go bust, although, even in the current financial climate, it is highly unlikely. Another thing that might happen is that the industry would come to the failing trust's aid so as not to give unit trusts a bad name.

If Neptune or Jupiter went bust it would have no real effect on us. Earth's atmosphere would shield us from most of the flak, and the pull of gravity from these gas giants on the earth is fairy infinitessimal.

thrupence

pumpndump wrote: »

If Neptune or Jupiter went bust it would have no real effect on us. Earth's atmosphere would shield us from most of the flak, and the pull of gravity from these gas giants on the earth is fairy infinitessimal.

Nice one :beer: