Income unit trusts - The basics

• Income unit trusts aim to provide investors with a regular income.
• You can aim for growth by reinvesting any income earned.
• The trusts invest in fixed interest securities, such as corporate bonds (loans to companies) and government securities (loans to the UK Government which are known as gilts).
• Legal & General offers a range of income trusts with different levels of risk. You can invest online today.
• Your options provides further information about your investment options.
• You can find out more about fixed interest securities by reading our Guide to Corporate Bonds
• Once you have invested with us you can manage your investments online, anytime.
• Unit trusts are designed as medium to long term investments of, ideally, at least five years.
• Both capital and income values may fall as well as rise and are not guaranteed. You may not get back the money you invested.
• If you choose a trust which invests overseas, changes in exchange rates between currencies may cause the value of your investment and the level of income to rise or fall.
• Refer to risk factors for the other risks associated with this product.

Your options

You may want to consider investing directly into a unit trust if you have already used up your ISA allowance for this tax year. Although unit trusts do not offer the same tax advantages as ISAs, there are no investment limits although you can only invest up to £50,000 online.

Legal & General offers a range of income unit trusts. You can choose from these three:

1. Fixed Interest Trust. This invests only in good quality investment grade bonds with an average credit rating or higher, and government securities which are also considered relatively safe. Income is paid to you quarterly.
2. Managed Income Trust. This invests largely in good quality investment grade bonds and government securities, which are considered secure investments, but combines this with an element of higher risk investment. Income is paid to you quarterly.
3. Managed Monthly Income Trust. This has the same investment profile as the Managed Income Trust. Income is paid to you monthly.

• You can invest with a minimum lump sum of £500 or a regular minimum contribution of £50 per month. If you opt to invest monthly, you will not be able to take an income until you have at least £500 fund value.
• The income unit trust product table clearly lists the management charges for these unit trusts.
• See how each of our income unit trusts has performed for the last five years using the fund performance table.

The charges

• Annual management charges are kept low, meaning that more of your money remains invested.

These trusts offer more than one class of units. The details below relate to the unit class 'R', which is the class available online.

* these include auditors, trustees, custodian and regulator fees.

Risk factors

All investments carry an element of risk. Please bear in mind that:

• Unit trusts are designed as medium to long term investments of, ideally, at least five years.
• Both capital and income values may fall as well as rise and are not guaranteed. You may not get back the money you invested.
• These unit trusts invest in fixed interest securities (corporate or government bonds). This means they are sensitive to interest rate trends. An increase in medium to long term interest rates is likely to reduce the value of your investment.
• In order to generate a high level of income, the Managed Income ISA and the Managed Monthly Income ISA invest in bonds with higher yields, but which also carry a significant risk to capital.
• As the Monthly Income Trust and Managed Monthly Income Trust may invest overseas, changes in exchange rates between currencies may cause the value of your investment and the level of income to rise or fall.
• Each trust has its own objectives and risk factors. These are detailed in the Key Information document (including Simplified Prospectus) which can be downloaded from the right-hand side menu. Before you decide to invest, you must read these documents.