In this section
Important information - please keep in mind that the value of investments can go down as well as up, so you may get back less than you invest. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.
What is an investment trust?
Investment trusts have been around for a lot longer than other types of investment funds—over 150 years—and are like them in many ways. Your money is pooled with contributions from many other people and used to buy a portfolio of investments.
They’re chosen and managed by an expert team, who are in charge of the day-to-day running of the trust, deciding when to buy and sell investments. Your investment may rise in value although there is no guarantee and you may get back less than your original investment.
Additionally, pooling your money with other investors' contributions means you get access to a much wider range of investments. This diversified portfolio, potentially across hundreds of companies, limits reliance on the fortunes of just one or two businesses.
How they work
Investment trusts are Public Limited Companies (PLCs) that are listed on a stock exchange, so investors buy and sell from the market. They come with their own independent board of directors, and you become a shareholder when you invest in a trust.
As investment trust shares are listed on the London Stock Exchange, their prices are affected by supply and demand. This means that share prices may be higher or lower than the Net Asset Value (NAV). The NAV is the value per share of all the assets owned by the investment trust.
An investment trust has a fixed number of shares (closed-ended) so managers can buy/sell when the time’s right, not because investors join or leave.
Traded on an exchange
The price of an investment trust is determined by the market, not its NAV.
Investment trusts can borrow and use gearing to take advantage of opportunities. Interest must be paid whether the trust profits from the loan or not.
Investment trusts can retain up to 15% of their income in any year. This can provide extra income in the future and help make their payments consistent.
Every investment trust has an independent board of directors. They have a legal obligation to safeguard shareholders’ interests.
By buying shares in an investment trust, an investor becomes a company shareholder. They can then vote on issues such as the appointment of directors or changes to the investment policy.
Benefits of investment trusts
Investing in investment trusts has a number of benefits.
Risks of investment trusts
There are, however, a few things to consider, as well.
Investment trusts management
Evaluating investment trusts
It takes time, experience, knowledge and skill to work out which investment trust could be the right for you. Here’s what you need to consider, along with your personal circumstances (like the length of time you want to invest).
How to invest in investment trusts
Fidelity investment trusts
Capture the opportunities that stock markets can offer with our investment trusts, some of the most compelling investments across Asia, China, Europe, Japan, and the UK.
Choose from a wide range of investment trusts
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