Huge daily lurches in both directions by the stock market have revived the debate about the relative merits and de-merits of unit trusts and investment trusts.
Both pool money subscribed by investors and spread it across the shares of dozens - occasionally hundreds - of companies.
The daily value of a unit trust relates directly to the prices of its underlying portfolio. An investment trust, by contrast, is a listed company in its own right, with a share price dictated by supply and demand.
Investment trusts are conventionally regarded as more risky. Unlike, unit trusts they can - and do - borrow money to gear up their investments in the hope of outpacing the market on the way up. It can leave them exposed on the way down.
Investment trust shares have a way of lagging behind the value of their underlying portfolios even in good times.
This gap, or discount, can widen alarmingly when the stock market turns jumpy, sending investment trust share prices into a skid.
Unit trusts, though, have problems of their own. In the 1987 crash, there were widespread complaints that some unit trust managers stopped answering the phone.
Investors were temporarily locked in. This time the problem has arisen only with a few Asian funds caught owning Malaysian shares when the Malaysian Government banned exports of capital. They overcame the problem quite rapidly by hiving off the frozen Ma laysian investments into separate trusts.
Yet you can always get out of an investment trust by ringing up your stockbroker - though you may not like the price. …