Investment Trusts work similarly to Unit Trusts and OEICs in that they provide a means of pooling your money with other investors. They are however different in that they are publicly listed companies whose shares are traded on the London Stock Exchange and also in that they have a finite window of opportunity in which investors can subscribe rather than being open ended. The prices of shares in Investment Trusts will fluctuate according to investment demand and changes in the value of their underlying assets. They are therefore subject to the same types of risk associated with any product that invests money either directly or indirectly in the stock market but the level of risk depends on the trust’s strategy and the classes of assets held.
The Investment Trust Company may borrow to finance further investment (gearing). The use of gearing increases the risk of an Investment trust compared to a similarly invested Unit trust/OIEC and is likely to lead to increased volatility in the Net Asset Value (NAV), meaning that a relatively small movement, down or up, in the value of a company’s assets will result in a magnified movement, in the same direction, of that NAV.
A particular Investment Trust may invest in companies that are not listed on a stock exchange (unlisted investments). These can also be more volatile in their price fluctuations and harder to sell than listed shares.
The value of investments and the income they produce can fall as well as rise. You may get back less than you invested.
Tax treatment varies according to individual circumstances and is subject to change.
Investment Trusts work similarly to Unit Trusts and OEICs in that they provide a means of pooling your money with other investors. They are however different in that they are publicly listed companies whose shares are traded on the London Stock Exchange and also in that they have a finite window of opportunity in which investors can subscribe rather than being open ended. The prices of shares in Investment Trusts will fluctuate according to investment demand and changes in the value of their underlying assets. They are therefore subject to the same types of risk associated with any product that invests money either directly or indirectly in the stock market but the level of risk depends on the trust’s strategy and the classes of assets held.
The Investment Trust Company may borrow to finance further investment (gearing). The use of gearing increases the risk of an Investment trust compared to a similarly invested Unit trust/OIEC and is likely to lead to increased volatility in the Net Asset Value (NAV), meaning that a relatively small movement, down or up, in the value of a company’s assets will result in a magnified movement, in the same direction, of that NAV.
A particular Investment Trust may invest in companies that are not listed on a stock exchange (unlisted investments). These can also be more volatile in their price fluctuations and harder to sell than listed shares.
The value of investments and the income they produce can fall as well as rise. You may get back less than you invested.
Tax treatment varies according to individual circumstances and is subject to change.
Stanford Rhodes Wealth Management Limited is registered in England and Wales, Number 5517447. Registered Address: 4 Clifton Moor Business Village Clifton Moor Business Village, James Nicolson Link, York YO30 4XG.
StanfordRhodes Wealth Management Ltd is an Appointed Representative of Quilter Financial Limited,which is authorised and regulated by the Financial Conduct Authority and is entered on the FCA register (http://www.fca.org.uk/register) under reference 497604.
The information and content within this website is subject to the UK regulatory regime, and is therefore targeted at consumers based in the UK.
