Why Invest?
With their long-term approach, low charges, and wide choice of investment objectives, investment trusts and investment companies are ideal for:
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Growing your wealth
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Repaying a mortgage
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Building a retirement fund – and providing income in retirement
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Investing for children and grandchildren: school fees, university or a better start in adult life – the deposit for a house, starting a business, a car or even a trip around the world
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A monthly savings option means it's easy to start and even small amounts can add up significantly over time.
Investment trusts and investment companies have a long track record of helping people to achieve their investment goals, whether it is for income, capital growth, or both.
They allow investors to pool their money together and spread the risk.
They have the same objectives as other collective investments such as unit trusts, but have several key advantages compared to other types of funds.
Key Benefits
An effective way to invest
Investment trusts and investment companies can be a particularly effective way to invest:
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Closed-end structure allowing the manager to take a longer-term view without having to sell and repay investors
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Listed on the London Stock Exchange, an Independent Board of Directors will look after shareholders' interests. They can borrow (known as gearing) in order to take advantage of opportunities and to maximise investment strategy
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Investment trusts and investment companies trade at a discount or premium to their NAV (Net Asset Value) meaning that if they are trading at a discount to their share price you can buy at an attractive price (eg the share price is below the value of the underlying assets)
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It spreads the risk by owning shares in a wide range of companies and sectors
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Charges are generally lower compared with unit trusts and OEICs
Tax Free Savings
Investment trusts and companies are eligible investments for Individual Saving Accounts (ISA) and Self Invested Personal Pensions (SIPP).
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What are Investment Trusts and Companies?
Investment trusts are companies that are domiciled in the UK and invest in shares and securities of other companies that trade on stock markets worldwide. They are listed on the London Stock Exchange, are run by an independent board of directors, and their shares are traded on the open market.
The difference with an investment company is that they are domiciled outside of the UK, usually in Jersey or Guernsey.
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