1 What is the difference between an unit investment trust and an investment trust ? 2 Investment trust as a whole company manage one portfolio or they have various portfolios? 3 An investment trust issues shares , raise capital and then pays out to the investors. So you have to buy the shares in an investment trust to be a part of the portfolio earnings or you can just invest the money in it ? 4 I dont understand the reasons so as to why they stand at a discount to their net asset value ? Especially the marketability point.
There is not a "unit investment trust" as far as I know. The differences between unit trusts and investment trusts are many, and detailed in Subject CA1, but the main one is that unit trusts are open ended and create new units every time an investor wants to invest in the trust. Each investment trust would be a specific portfolio (not many). One management company (such as Prudential) would manage many investment trusts You buy the shares on the stock market if you want to be invested in an investment trust. Standing at a discount is an odd issue. The core reading says its because the managers deduct an annual charge, and investors see this regular deduction from their portfolio as a negative and down-value the trust shares as a result. There may be other people that would give different answers though I suspect.
