Why not take the easy way? Invest in lots of shares in one go
Investment trusts offer access to a broad basket of shares held in one single investment. Use the investment trust selector tool below if you’re feeling confident and start exploring the range available.
If you’re new to investment trusts or just want to find out a bit more, scroll down for some help and information.
Investment trusts are set up like companies and you can invest in them on the stock exchange just like any other publically listed company. When you invest in an investment trust you will become a shareholder of that investment trust. What makes them stand out from other listed companies is that their business is solely to invest into other companies by buying their shares. So by investing into an investment trust you will be getting exposure to all the companies in which the investment trust has bought shares.
Investment trusts are similar to Unit Trusts and OEICs, collectively referred to as mutual funds in many ways but have some key structural differences. They both offer a ‘ready-made’ basket of shares which means you can invest in many different companies through a single investment in the mutual funds or investment trust. However, investment trusts are traded on an exchange, like shares, and they can ‘gear’, or borrow, money to invest whereas mutual funds cannot.
An investment trust is a limited or public company. But unlike companies who sell goods or services, their business is purely to buy shares in other companies.
Investors will typically look for an investment trust which is managed by someone with at least five years of experience. Some investment trusts are run by highly regarded managers with more than 20 years of experience which usually indicates an ability to manage investments and risk in every sort of market.
You may also want to invest for income. Some Investment Trusts pay out a 4-5% yield, or income, on an annual basis (although these amounts are not guaranteed).
Finally you may want to look at how any given investment trust has performed against its peer group, or its ‘benchmark’. Resist the urge to look at the last 12 months alone. Whilst past performance is not an indication to future performance you should typically look at the performance over at least a five year period.
A Real-Estate Investment Trust (REIT) is a company that owns or finances income-producing real estate. REITs are similar to funds or ETFs, but instead of owning a basket of stocks, the REIT owns a portfolio of commercial or residential properties or mortgages. Shares in a REIT can be purchased in the same way as ordinary shares or an ETF.
You can invest in your chosen investment trust through any one of our three account options:
Access a wide range of global investments in this flexible, unrestricted account.
Take advantage of tax free investing with our Stocks and Shares ISA today.