Questions and Answers
Unit trusts explained

Unit trusts explained
Although unit trusts do not offer the same tax advantages as ISAs, they allow you to invest as much as you like. So once you have used up your ISA allowance for the tax year, you can invest even more in a unit trust.
If you are thinking of investing money in stocks and shares through a unit trust, we recommend you only invest money you can afford to save for at least five years, to increase your chances of a good return.
Remember, most stock market investments are considered medium to high risk and there is no guarantee you will get back the full amount you invest. If you are not comfortable at the thought that your savings might go down as well as up in value, the stock market probably is not right for you.
To see the Simplifed Prospectus for the investment funds in a Virgin Unit Trust click on the link below.
Virgin Unit Trust Simplified Prospectus
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Alternatively, you can call 08456 10 20 20 or email info@virginmoney.com to have a copy of the Simplified Prospectus sent to you.
How unit trusts work
Our funds have no initial charges or bid offer spread, so whether you are buying or selling units the price is the same.
Both the FTSE All-Share Tracker Fund and the Bond and Gilt Fund have an annual management fee of 1% a year with no other charges.
The Virgin Climate Change Fund has an annual management fee of 1.75%. There may also be a 20% performance related fee, which we only earn if we outperform agreed benchmarks.
Your investment will be covered by the FSCS for up to £50,000 per person. Information about the scheme can be found in the product terms and conditions and on the FSCS website www.fscs.org.uk.
Bond and Gilt fund
Investors in our Bond and Gilt Fund who have reinvested the income received over the last five years, have had an average annual return of 3.6% turning £3,000 into £3,588.
| This table shows the annual return in the last five years | ||||
|---|---|---|---|---|
| 30/09/2006 to 30/09/2007 | 30/09/2007 to 30/09/2008 | 30/09/2008 to 30/09/2009 | 30/09/2009 to 30/09/2010 | 30/09/2010 to 30/09/2011 |
| -1.7% | -0.3% | 7.8% | 8.7% | 4.1% |
Source: Morningstar Workstation, year on year 30.09.06 – 30.09.11, calculation based on figures in £’s on a bid to bid basis, net of basic rate tax with income reinvested.
Remember, with bonds and gilts the value of your fund and the interest that gets reinvested can go down as well as up on a daily basis, with no guarantees you'll get back the full amount you invest. To maximise your chances of a good return you should be looking to invest for at least five years.
It's also worth remembering that the past performance of an investment isn't always a guide to how well it may do in the future.
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