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Investment Trusts, What are they? - Advice, Planning and Management, Sabre Financial Kingsbridge, Salcombe, Totnes, Devon

Investment Trusts.

Investment Trust Advice, Planning & Management

Investment Trusts are less well known than unit trusts and OEICs, but they have many advantages. As companies, they purely exist to buy and sell shares in other companies. By putting your money in an Investment Trust, you're effectively becoming their shareholder.

Below, you can can find out more about Investment Trusts, but if you want to talk to one of our experienced Investment Trust Advisers please call, email or use our contact form.

Simply call us on 01548 856444 or

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How Do Investment Trusts Work? 

You, along with other investors, put your money into the Investment Trust Company. In return you become a shareholder. They will use your money to purchase shares in hundreds of other companies. If these companies do well, the Investment Trust portfolio will grow and so too should the value of your shares. It's like playing the stock market, without the hassle of buying, monitoring performance and selling individual shares. 

Unlike Unit Trusts and OEICs, these are 'close-ended' investments. This means that the number of shares available is fixed, enabling the fund manager to plan ahead and make better investment decisions. 

How Are Investment Trust Shares Priced? 

Because Investment Trusts are companies listed on the Stock Exchange, their shares are issued on the stock market. Although the actual value of the shares is determined by the investments in the fund, the price you pay for the shares will change according to supply and demand. If more people want to buy shares than sell them, then the price will rise. Similarly, it will fall if more people are trying to sell. As a shareholder, you won't sell your share back to the trust, but to another buyer, via the stock market. 

Who Looks After Your Investment? 

A fund manager within the trust. They are tasked with selecting companies to invest in and will have an investment objective to focus on. Being listed companies, each trust has an independent board of directors. They are accountable to shareholders. 

What Income Will You Receive? 

There are also different classes of shares available. Some will pay 'income' at regular intervals, but will not entitle you to any of the growth in the fund. Others will give you part-ownership of the fund but will not pay a regular income. 

What Are The Risks of Investment Trusts v Potential Returns? 

Like any investment in the stock market, movements in value can be larger. There are different risk options, so you can choose one you feel comfortable with. Over time, volatility in the stock market has generally smoothed out, and on past performance, the returns have outshone lower risk forms of savings and more than compensated for inflation. Realistically, they are intended to be a long-term investment aimed at people happy to stay with the investment for more than five years. 

What Are The Costs? 

Surprisingly, investment trusts are usually cheaper to buy than unit trusts. Fees will depend on whether you buy shares directly from the trust or via the stock market. ·  

Exploring how you want your Investments to work for you, over what time-frame and whether there are other aspects you wish to take into account, is a key part of the initial conversation that Sabre Investment Advisors will have with both new and experienced Investors.  

To get the best advice on Investments Trusts, whether you require general advice or help with planning and management, contact Sabre Financial today. 

Talk to an Investment Trust Adviser

Simply call us on 01548 856444 or

Get Investment Trust Advice