Routledge Dictionary of Economics, Second Edition
A company whose capital is invested in the stocks and shares of other companies.
It offers the investor the opportunity of benefiting from a spread of different investments. This type of trust was invented by Foreign and Colonial in 1886 (still a market leader). Compared with UNIT TRUSTS, they have the advantages of GEARING in that loan capital can be used for the benefit of shareholders, of lower costs and of being able to retain their underlying shares during a stock market panic.
See also: mutual fund
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