Investment Trusts

Investment trusts continue to be a traditional method of investing where the trust will hold a large range of holdings to spread the risk. Exposure to many asset classes are available including equity and fixed income and specialist sectors like biotechnology and healthcare.

Advantages of Investment Trust

Increased diversification
Lower volatility than single stock holdings
Exposure to world class fund managers with historic track records
Potential to buy at a discount Net Asset Value (NAV)
Many investments trusts borrow (gearing) to boost returns
Disadvantages of Investment Trusts

Some use gearing; this can potentially increase returns but also losses
Popular holdings can incur a premium to Net Asset Value (NAV)
Internal management fees could apply

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