What is an Investment Trust?

An Investment Trust is a type of company that pools investors’ money to buy a mix range of investments in a professionally managed portfolio.

Experienced fund managers handle the day-to-day decisions for you. Researching markets, identifying opportunities, and adjusting the portfolio as needed.

 


How do Investment Trusts work?


Investment Trust companies are listed on the stock exchange, so you can buy and sell them just like other shares. The price will vary through the day depending on demand.
 

Why should I consider one?

Regular Income

Can retain investment returns to smooth income payments and maintain consistent income even when markets are volatile.

Long-term focus

The closed-ended structure allows managers to invest in less liquid or more specialist areas, like infrastructure or private equity.

Potential for higher returns but greater risk

Trusts can borrow money to invest more, a strategy known as gearing. This can boost returns when markets rise, though it also increases risk.

Portfolio Diversification

This offers exposure to many different assets with just one investment.

Please remember that the value of investments and the income from them can fall as well as rise, and you may get back less than you invest. If you’re not sure about investing, seek financial advice. There will normally be a charge for that advice.

Sound similar to funds?

Investment Trusts and funds both pool your money to buy a range of other investments but there are some key differences.

Buying and selling

Investment Trusts: are bought and sold on the stock market like shares. Their price can go up or down throughout the day depending on investor demand.

Funds: are priced once a day, and their price is based purely on the value of the investments they hold.

Special features

Investment Trusts: can borrow money to invest and keep some returns to ‘smooth’ the income they pay out to customers.

Funds: managers can’t borrow money or hold back returns.

Ready to invest?

It’s easy to find the right Investment Trust for you. Our Investment Trust Centre will help to get you started.

Visit Investment Trust Centre

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Your money is protected

Investments with Bank of Scotland Share Dealing are protected up to a total of £85,000 by the Financial Services Compensation Scheme. This limit is applied to the aggregated total of any stock or cash held across the following brands which we administer.

This is in addition to any other savings deposits you may hold across Lloyds Banking Group.

Important legal information

Bank of Scotland Share Dealing Service is operated by Halifax Share Dealing Limited. Registered in England and Wales No. 3195646. Registered Office: Trinity Road, Halifax, West Yorkshire HX1 2RG. Authorised and regulated by the Financial Conduct Authority under registration number 183332. A Member of the London Stock Exchange and an HM Revenue & Customs Approved ISA Manager.