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Investment Trusts

What are Investment Trusts?

An investment trust is a listed company with shares quoted on the London Stock Exchange, which invests in the shares of other companies or in fixed-interest securities, unquoted securities or property. As a quoted company, the share price of an investment trust is determined by the supply and demand for its shares on the stock market.

An investment trust has an independent board of directors who are responsible for looking after shareholders interests.

 

How do Investment Trusts Work?

When shares in investment trusts are purchased, you are buying 'an interest' in all of the companies that the investment trust decides to invest in. The dividend income you will receive from the investment trust, and the value of their investment trust shares, will rise and fall in line with the performance of the shares which the investment trust owns and market forces.

There are a number of tax advantages to investment trust investment, and they are well suited to those who want to make regular monthly savings for their retirement, for their children, or for specific purposes like school fees or house purchase.

Investment trusts are a useful vehicle for people who want to:

  • Invest in the stockmarket over the medium to long-term.
  • Want to spread their costs, risk and minimise charges.
  • Not spend too much time monitoring their investments.
 

How risky are Investment Trusts?

The risk associated with an investment trust is less than individual equities because an investment trust is a basket, which is balanced out by a number of equities.

 

How much will it cost?

Investment trusts are traded like shares and are charged at normal online commission rates, which start from just £5.95 for active traders. See full rates and charges.

In addition, Ongoing Charges are shown in the Investment Trust Quickrank.

 

What type of Account do I Need?

You can invest into investment trusts through our:

Get Started with Investment Trusts

TD offers a range of accounts which can be used to buy shares in investment trusts:

Risks

  • A percentage of the value of your investment may be charged by the Investment Trust provider. To view these charges (Ongoing Charges), please refer to the Investment Trust Quickrank.
  • The value of your investments can go down as well as up. You may not get back all the money that you invest.

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Investment Trust Quickrank Tool

Use this easy to navigate tool to find information, performance data and statistics about Investment Trusts.