Exploring the conditional performance of UK unit trusts

We evaluate the conditional performance of U.K. equity unit trusts using the approach of Lynch and Wachter (2007, 2008) relative to three conditional linear factor models. We find significant time variation in the conditional performance of some trust portfolios and individual trusts using the lag term spread as the information variable. The conditional performance of the trusts is countercyclical and larger trusts have more countercyclical performance than smaller trusts within certain investment sectors. These patterns in conditional trust performance cannot be fully explained by the underlying securities that the trusts hold.

Art always at heart

The Art Workers Guild, brother body to the SPAB and once presided over by William Morris and his followers, is 125 years old this year. Alan Powers looks back over its history, and sheds light on the characters and common bonds between the two bodies – while present Brothers of the Guild are pictured at work by photographer Lara Platman for new book to mark the event.