Holly Mckay
Holly MackayFounder and CEO
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    Home • Investment Trust Hub

    Investment Trusts: How to pick a good one

    Key Facts

    • Total Assets: £267bn

    • First Trust Established: 1868

    • Unique Feature: Can smooth and reserve dividends

    • Investment Sectors: Global equities, property, infrastructure, smaller companies

    What Are Investment Trusts?

    Investment trusts are listed companies that invest in other companies, offering a unique approach to building a diversified investment portfolio. Unlike standard funds, they provide distinctive advantages like income smoothing and the ability to use gearing to potentially boost returns.

    Core Advantages

    1. Diversification: Access multiple companies through a single investment

    2. Dividend Flexibility: Can reserve up to 15% of dividends for lean years

    3. Active Management: Professional managers selecting investments

    4. Potential for Consistent Income: Some trusts have 50+ years of growing dividends

    Beginner-Friendly Options

    Top recommended starting investment trusts:

    • Henderson International Income

    • Alliance Witan

    • Scottish American

    • F&C Investment Trust

    Key Differences from Index Trackers

    • Index Tracker: Passive, tracks market average

    • Investment Trust: Active management, strategic stock selection

    Unlock this article to continue reading

    ✓ Detailed trust performance analysis ✓ Comprehensive dividend strategy guide ✓ Expert trust selection criteria ✓ Risk management techniques ✓ Comparative trust performance tools ✓ Income investment strategies

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    Important stuffHolly and the team have worked in the finance industry for many years but we are not regulated to give you personal financial advice. For every story on this website about a good investment, or something which went up by 10% or made someone £200, we could also share a story about a bad investment, something which fell in value or lost someone £200. We aim to provide general information and pointers – and btw we are totally agnostic about which providers you might pick – but if you have complex affairs, want personalised advice or need specific recommendations, please look at advice pages and see if regulated digital or traditional financial advice would be the best solution for your needs. Boring Money Ltd is a limited company registered in England and Wales under registration number 09459832 and we have our registered office at 10 Lower Thames Street, London, England, EC3R 6AF.
    Risk warningAs is always the case with investing, your capital is at risk. The value of your portfolio can go down as well as up and you may get back less than you invest. Tax treatment depends on your individual circumstances and may change in the future.
    Boring Money Ltd is a limited company registered in England and Wales under registration number 09459832 and we have our registered office at 10 Lower Thames Street, London, England, EC3R 6AF.
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