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Investment Trusts at a glance

  • Investment trusts are companies that invest in the shares of other companies and assets

  • By doing this they can help you to spread your investment risk

  • The value of their shares still goes down and up though and you can get back less than you invested


Important information

Please remember the value of your investments and any income from them can go down as well as up and you may get back less than the amount you originally invested.

All investments carry an element of risk which may differ significantly. If you are unsure as to the suitability of any particular investment or product, you should seek professional financial advice



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What can I trade in on the Alliance Trust Savings Platform?

To view the list of all the investment trusts available on the Alliance Trust Savings platform read our List of Investment Trusts. For ISA accounts please remember there are a few restrictions.

view the List of Investment Trusts

Alliance Trust Savings is pleased to be the distribution partner for the new, “Independent guide to quoted investment companies”.

Download guide

How Investment Trusts work

When you buy a share in an Investment Trust you’re putting your money together with others to invest in the shares of other companies and assets.


It’s a similar idea to Unit Trusts and Open Ended Investment Companies (OEICs). But Investment Trusts have an independent board of directors and have to answer to their shareholders. They can also take some risks that Unit Trusts and OEICs are not allowed to (like borrowing money to invest).

Investment trusts are ‘close ended’. Which means they can only issue a set number of shares at any one time. You can buy and sell these on the stock market.

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Unfamiliar with some of the terms? Our glossary might help.

go to the glossary

Income from Investment Trusts

Like other shares, investment trust shares can pay you income in the form of a dividend based on how the trust performs. Dividends aren’t usually guaranteed.


The other way to generate income from investment trust shares is, of course, to sell them. If you sell investment trust shares in an IDA at a higher price than you bought them for, this counts as a gain for any capital gains tax you might have to pay.

Charges

Look for the Ongoing Charge on our Investment Selector page for the trust you are interested in. This is how much you pay to the manager of the trust each year for looking after your investment, and paying costs like directors’ fees and audit fees.

Some investment trusts also charge performance fees which are paid to the manager if they meet certain targets.


Remember:

  • Be clear on your investment goals and how much risk you are prepared to take.

  • Do your research before deciding to buy.

  • Get advice if you need it.

Find a financial adviser near you

Unbiased

London Stock Exchange (LSE)

In the UK the main market for shares is the London Stock Exchange (LSE).


Its split into different indices made up of groups of companies. The most famous is the FTSE 100 covering the 100 biggest companies listed on the LSE.

The FTSE 100 index is often used as a guide to overall market performance for shares. It's updated through the trading day with a closing time of 4.30pm each business day.

Another popular market for shares is the Alternative Investment Market (AIM). This is for smaller companies that might be looking to grow.

AIM Market guide
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Extensive investment choice.

Browse investments

Our Investment Selector is powered by Morningstar, a leading provider of investment research. Use it to:

  • Check what you can access through your Account (over 4,000 investments to choose from)

  • Find out about the risks and charges for each investment (which are on top of the charges you pay us for your Account)

  • Review past performance for investments although remember that past performance is not a guide to future performance


The price of Investment Trusts

If a trust has £1million of assets and one million shares its ‘net asset value’ is £1. But this isn’t necessarily the price you pay.


The actual price depends on supply and demand in the stock market.

Sometimes the share price is less than the net asset value. This looks like good value. But remember things could change by the time you come to sell. You may still get back less than you put in.

More about risk

Use investment selector to research the types of assets your trust invests in. Some are riskier than others.


Find out if the trust borrows money to buy shares (this is known as 'gearing'). If so, your returns might be better but your losses greater.

Alliance Trust Savings Limited is a subsidiary of Alliance Trust PLC and is registered in Scotland No. SC 98767, registered office, PO Box 164, 8 West Marketgait, Dundee DD1 9YP; is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, firm reference number 116115. Alliance Trust Savings gives no financial or investment advice.