Unit Trusts

Trusts can take a variety of different forms, depending upon the jurisdiction in which the trustees are sited, the laws of the jurisdiction under which they are drafted and the purpose for which they’re created. In many respects the limitation placed upon a trust is by the skill and ambition of its architect.

Trusts have a multitude of different uses and applications depending upon the circumstances.

Unit trusts have developed over time as a mechanism for multiple investors in them to participate in an overarching trust structure divided into separate interests. With the first Unit Trust having been seeded in the UK in 1931 they are a well-established vehicle. It is common for unit trusts to have more than one type of unit – income units and accumulation units – having different rights and benefits attaching to them.

In this example, income units pay returns generated by the unit trust back to the unitholder whereas the investment return attributed to accumulation units is retained by the unit trust and reinvested for additional growth and compounding.