The term 'investment trust' is a misnomer - it's a company, not a trust. As with any other company, investors buy shares. The money raised is invested by the trust and if the underlying investments do well the share price of the investment trust rises.

Investment trusts are closed ended which means they have a limited number of shares in issue. This can help fund managers to make long-term plans as they don't need to worry about money coming into the fund or being withdrawn.

They also have the option of gearing which allows them to borrow to take advantage of attractive investment opportunities. This can greatly increase returns to shareholders but is also one of the reasons an investment trust carries more risk than other types of fund with similar investment profiles such as a unit trust or OEIC. 

Shares in investment trusts are traded on the London Stock Exchange so their price is governed by demand. As a result the shares are often priced at a discount or premium to the value of the trust’s underlying assets which is known as the net asset value (NAV). A change in the gap between the NAV and the share price can magnify any gains although it could also do the same for any losses.