In what sorts of industries do trusts invest
There are several different industries in which funds frequently invest:
1. Infrastructure trusts are still a large investment area, focusing primarily on smaller cities that cannot secure other financing to expand their infrastructure. However, these investments are seen as risky if they are supported only by local or municipal government guarantees.
2. Financial trusts are playing an increasing role despite the recent downturn in stock markets. However, the Chinese Securities Regulatory Commission has limited the opening of new stock trading accounts by trust companies, which may limit the expansion of this sector in the future.
3. Real estate trusts invest in, and take ownership of, real properties. Though the government took steps to crack down on real estate lending by banks, trusts have not yet experienced similar restrictions.
4. Real estate investment trusts, by contrast, do not take ownership of properties, but rather purchase the beneficial rights to a property like mortgage or rental payments. This is a relatively new type of investment, and one that has not yet experienced much regulation – there are not even any specific laws on taxation of revenue from real estate investment trusts at this time. However, they allow greater participation in the real estate market, as they permit investment in real estate with a much smaller capital commitment and more liquidity than a traditional real estate investment.