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Investment trusts explained

Learn more about investment trusts, the most established of the investment vehicles


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    Find investment trusts listed on the UK and global markets

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What are investment trusts?

Investment trusts are the most established of the investment vehicles having been around for over 150 years, and today can invest in everything from UK dividends to high-risk emerging markets.

They are public limited companies (PLCs) which aim to produce returns by investing in other income-producing companies, with shares in the trust sold to investors.

  • All investment trusts are closed-ended meaning only a fixed number of shares are issued. Investors buy existing shares from their previous owners and gain an ownership stake in a company with its original pool of investments.
  • Each trust has a board of directors, and most are actively managed with fund managers in place tasked with following a particular investment strategy such as focusing on an individual sector, country or asset class.
  • A key feature of investment trusts relates to gearing. This means they can borrow additional money to be used for investments, and they can take bigger risks with potentially greater rewards or losses.
  • Investment trusts are traded on exchanges, like the London Stock Exchange, and so market sentiment comes into play with prices moving up and down.

Investment Risk Warnings

The value of investments can fall as well as rise and any income from them is not guaranteed and you may get back less than you invested. Past performance is not a guide to future performance.

EQi does not provide investment advice. If you are in any doubt as to the risk or suitability of an investment or product you should seek advice from an independent financial adviser.

The extent and value of any ISA tax advantages or benefits will vary according to the individual's circumstances. The levels and bases of taxation may also change.

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  • What is a real-estate investment trust (REIT)?

    A real-estate investment trust is a company that owns or finances income-producing real estate.

    REITs are the same as investment trusts, but instead of owning a basket of stocks, the REIT owns a portfolio of commercial or residential properties or mortgages. Shares in a REIT can be purchased in the same way as ordinary shares or an ETF.

Which account is right for you?

  • Dealing Account

    For individuals or a group of up to four people, access global investments with this flexible, unrestricted account

  • Flexible ISA

    Invest up to £20,000 per year, take advantage of tax-free investing, and access your money at any time

  • SIPP

    Enjoy more control and access to a wider range of investment options and benefit from attractive tax advantages

  • Lifetime ISA

    Available for those aged 18-39, you can invest up to £4,000 per year and the government will add a 25% bonus up to a maximum of £1,000