Investment Trusts Explained
Investment trusts, also known as collective investment schemes, are a type of investment fund. They are a medium to long term investment which have the possibility of capital growth and / or income. Investment trusts differ to other investment funds as they themselves are companies in which shares can be bought.
An investment trust is controlled by a fund manager who invest money on your behalf into different companies. Because the investments are made is into a number of different companies the financial risk is spread. As a result, an investment trust is generally lower risk than buying individual shares. However, be aware: because investment trusts are companies in their own right, they themselves are listed on the stock market and susceptible to market performances.
Investment trusts are a pooled investment, so your money is invested together along with others involved in the same trust, thus increasing the total amount being invested. You can either place your investment into a trust regularly such as every month, or in one lump sum. The amount of growth or income you receive will depend on market performance and on how much you have initially invested.
Unless well versed in investments and stock markets, deciding on the best investment trusts can be a difficult task. Discussing your options with an independent financial advisor may help you find the best trusts waiting for your investment.
Additional information can be found on our investment trusts page.
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