the question that i ask is all of these funds are forms of investing that allows an individual investor to lower the risk of their portfolio. . . now what i want to know is when shares or units of these funds are issued the value of them is decided by the worth of the underlying assets!!!! would this mean the net worth of the company or what.......please i need some clarification so that i can absorb the information."If you put money in a unit trust you buy units in a fund. The price of these units is determined by the value of the assets it holds"

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Your money is invested in a large portfolio of other companies shares, or, in some cases, bonds. So, how these companies fare collectively determines the worth of the investment.

In theory, yes. However, in reality the value of a company is determined by what people are prepared to pay for it - as such, the price goes up the more people are interested in the company and vice versa. So if you sell the physical assets of the company, you are unlikely to get back the actual value based on what people have paid for the company. A bit more would mean that the company also possesses some intangible (non physical) assets - things like the company's brand, reputation, etc.Hope this helps.

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