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What Is An Investment Trust?An investment trust is a type of collective investment which is very different to most others which an investor may have used or heard about. They use investors money to pool together and create a diversified portfolio of holdings. However, unlike most other collective investment vehicles, they are have a fixed number of shares available and are companies rather than funds. To our knowledge, this makes them unique. They are quoted on the London Stock Exchange. Investment trusts are also very old and the first, operated by Foreign and Colonial was founded in 1868. Over time, other vehicles - such as unit trusts and OEICS - have been marketed aggressively and have taken a big lead in the race for investment funds. But, year in and year out, the big investment trust companies keep managing huge sums of money. As with most other collective investments, an investment trust is generally targetted at one section of the world or market. This means that they do have rules as to where they can and cannot put their funds. These rules are usually laid down in their Articles of Association. It goes without saying that some areas and sectors offer more or less risks to the investor than other areas and as such, some funds are affected by currency movements or other economic events. Depending upon their individual rules, some can invest in other countries, provide venture capital to small and expanding firms or invest in differing types of company - after all, not all successful firms have a stock market listing! These investment trust companies are regulated by UK law which is overseen by the Inland Revenue (HMRC), the FSA and Companies Acts. The managers and marketers are governed by the Financial Services and Markets Act (2000). The pages of this section will look at various aspects of this wide topic. We hope that you find the following pages to be both useful and informative:
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