Offshore Investment Funds
A unit trust is essentially a fund where the money of many investors is pooled together to efficiently purchase a diversified range of assets and employs an investment professional to actively manage these assets. This allows the average investor access to a portfolio of funds that would otherwise be available to only the super-rich.
Offshore unit trusts are domiciled in jurisdictions where there is little, if any, tax liability on fund growth and dividends. This means the fund will remain a tax-efficient investment whilst the money remains in the fund.
Usually the unit trust is themed with popular themes include fixed income funds, bond funds, hedge funds, index tracking funds, managed equity funds (often specific to a geographical area or asset class) and commercial property funds.
The unit trust will also have a risk profile depending on the nature of the assets held within the fund; i.e. a unit trust that invests purely in new companies in an emerging market will be riskier than a fund that invests in capital protected assets or government bonds.
However, even a unit trust that invests purely in capital protected assets could go down in value if the cost of managing the fund is higher than return the assets are producing. Consequently, there is no such thing as a capital guaranteed unit trust.
