Investing in the shares of other companies and assets
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.
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.
If you are unfamiliar with some of the terms our glossary might help.
Alliance Trust Savings is pleased to be the distribution partner for the new, “Independent guide to quoted investment companies”.
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.
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.
Look for the Ongoing Charge within our
Investment Selector 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.
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.