The 5 Advantages of Investment Trusts [V2]

Investment trusts can pay a regular income

Investment trusts may make income payments to shareholders on an annual, quarterly or even monthly basis. They can also retain up to 15% of their income in any year, allowing them to keep some of the profits from particularly strong years and use them to top up dividends in future years should income from the trust’s investments temporarily fall.

Investment trusts can pay a regular income

Investment trusts can borrow money

The ability to borrow money to take advantage of investment opportunities can be useful to help increase returns for shareholders, although if the trust’s assets fall in value it can also increase the potential for losses.

Investment trusts can borrow money

Investment trusts have a fixed number of shares

A closed-ended structure means investment trust have no inflows or outflows. While this means shares can trade at a discount or a premium to the value of their underlying assets, it also allows fund managers to buy and sell assets when they feel the time is right, rather than when investors join or leave the fund.

Investment trusts have a fixed number of shares

Investment trusts are owned by their shareholders

Investment trusts are publicly listed companies. When you invest you automatically become a shareholder, which gives you the right to attend annual meetings and vote on issues such as the appointment of directors or changes to the investment policy.

Investment trusts benefit from independent oversight

Just like any other company, every investment trust has an independent board of directors, which is responsible for safeguarding shareholder interests. The board monitors the performance of the investment manager, the cost base of the trust and ensures value for money for shareholders.

Investment trusts are owned by their shareholders

Investment trusts benefit from independent oversight

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