Investment Trusts

Investment Trusts

Investment Trusts are closed-end investment vehicles that pool funds from multiple investors to create a diversified portfolio of assets. They are structured as public limited companies (PLCs) with a board of directors responsible for overseeing the trust’s operations. The trust’s investment decisions are made by professional fund managers with the aim of generating returns for shareholders.

What are the key features and benefits of Investment Trusts?


Investment Trusts offer access to a diversified portfolio of assets across various sectors and regions. This diversification can help manage risk and potentially enhance returns.

Professional Management

Investment Trusts are managed by experienced fund managers who conduct in-depth research and analysis to make informed investment decisions on behalf of shareholders.


Investment Trusts are traded on stock exchanges, providing investors with the ability to buy or sell shares on a daily basis, enhancing liquidity and flexibility.

Dividend Potential

Many Investment Trusts aim to generate regular income for shareholders by investing in dividend-paying assets. This can provide a consistent income stream for investors.

 Understanding Investment Trust Performance

Net Asset Value (NAV)

The Net Asset Value represents the underlying value of the trust’s assets. It is calculated by subtracting the liabilities from the total value of the trust’s assets.

Premiums and Discounts

Investment Trusts can trade at a premium or discount to their NAV. This can be influenced by supply and demand dynamics and market sentiment.

Performance Metrics

Investors can assess the performance of Investment Trusts through metrics such as total return, dividend yield, and volatility. These metrics provide insights into the trust’s historical performance and risk characteristics.

Types of Investment Trusts

Equity Trusts

These Investment Trusts primarily invest in stocks and shares, aiming for capital growth by investing in companies with growth potential.

Income Trusts

 Income Trusts focus on generating regular income for shareholders by investing in assets that pay dividends or interest.

Sector-Specific Trusts

Some Investment Trusts specialize in specific sectors or industries, allowing investors to gain exposure to targeted areas of the market, such as technology, healthcare, or real estate.

Risks and Considerations of Investment Trusts

Market Risk

Investment Trusts are subject to market fluctuations, and the value of investments can rise or fall based on market conditions.


Some Investment Trusts may employ gearing, which involves borrowing to invest. Gearing can amplify both potential gains and losses, increasing risk.

Management Fees

Investment Trusts incur management fees, which can impact net returns. It’s important to consider the fee structure and how it aligns with your investment objectives.

 Before investing in Investment Trusts, it’s crucial to assess your investment goals, risk tolerance, and time horizon. This helps determine the suitability of Investment Trusts for your individual circumstances.

Contact our team today to schedule a consultation and explore the potential benefits of Investment Trusts while ensuring regulatory compliance and investor protection.

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