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Investment Trusts aren't limited to comprising of stocks and shares in companies. In fact, they can be made up of lots of different assets, such as bonds or property. Trusts can even involve a combination of several asset types. This makes them a valuable tool for investors looking
to diversify their portfolio by spreading their investment across different areas and gaining access to assets which do not usually trade frequently, such as property,

without having to manage a complicated basket of singular investments by themselves. Plus, the fund manager does all the number-crunching on behalf of the shareholders, so they don't have to pour over the figures to work out what's working for them and what isn't.

Can borrow or 'gear'

Unlike other collective funds, such as unit trusts, Investment Trusts have the ability to borrow money. For example, say there is an Investment Trust which wants to incorporate Tesla shares but does not have enough capital to purchase them outright.

The fund manager would be able to borrow money from a bank in order to purchase Tesla shares without having to raise the cash first.

Now the Trust has Tesla shares as part of its portfolio, but it owes money to the bank for lending it the cash to do so. Ideally, taking on Tesla shares would generate a profit for the Trust (assuming Tesla itself performs well) and the Trust can then use this capital to repay the loan it took from the bank.

It's not all stocks and shares

Investment Trusts aren't limited to comprising of stocks and shares in companies. In fact, they can be made up of lots of different assets, such as bonds or property. Trusts can even involve a combination of several asset types. This makes them a valuable tool for investors looking to diversify their portfolio by spreading their investment across different areas and gaining access to assets which do not usually trade frequently, such as property,

without having to manage a complicated basket of singular investments by themselves. Plus, the fund manager does all the number-crunching on behalf of the shareholders, so they don't have to pour over the figures to work out what's working for them and what isn't.

Top 15 best investment options

Unlike other collective funds, such as unit trusts, Investment Trusts have the ability to borrow money. For example, say there is an Investment Trust which wants to incorporate Tesla shares but does not have enough capital to purchase them outright. The fund manager would be able to borrow money from a bank in order to purchase Tesla shares without having to raise the cash first.

Now the Trust has Tesla shares as part of its portfolio, but it owes money to the bank for lending it the cash to do so. Ideally, taking on Tesla shares would generate a profit for the Trust (assuming Tesla itself performs well) and the Trust can then use this capital to repay the loan it took from the bank.

It's not all stocks and shares

Investment Trusts aren't limited to comprising of stocks and shares in companies. In fact, they can be made up of lots of different assets, such as bonds or property. Trusts can even involve a combination of several asset types.

This makes them a valuable tool for investors looking to diversify their portfolio by spreading their investment across different areas and gaining access to assets which do not usually trade frequently, such as property,

without having to manage a complicated basket of singular investments by themselves. Plus, the fund manager does all the number-crunching on behalf of the shareholders, so they don't have to pour over the figures to work out what's working for them and what isn't.

Are investment trusts right for me?

Scroll down to find out, and discover additional (properly sourced) facts, statistics, and trivia about investment trusts we found interesting,
and think our readers might, too.

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