A brief history of trusts

The 19th century was a period of financial boom and bust. The world was full of opportunities, but fraud was rife, so the solution for the rich investor was to build up an enormously broad portfolio of high-yielding but individually risky overseas stocks. In the event of a few failures, the average yield would still be better than that generated by safer domestic investments. Many overseas government securities at that time yielded treble that of British gilts. However, smaller investors could not hope to achieve this level of diversification as the minimum sum required to invest in each...