Investment trusts

Article Abstract:

UK investors can obtain a number of advantages from investment trusts such as lower risks than investing in single companies. The sum of money managed is set, while unit trusts manage variable sums. Investment trusts have share prices since they are quoted companies. They can borrow funds for investment purposes, and this can involve risk as well as benefits when markets are rising. The number of specialist trusts has increased and these are geared to large investors who have better access to information to assess risks.

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Reporting and accounting for investment trusts

Article Abstract:

UK investment trusts publish reports and accounts annually. Terms used in these reports include net assets attributable to shareholding or NAV, and discount to net asset value, or the discount shares in investment trust are trading in relation to the value of underlying shares. The NAV performance relates to the performance of underlying assets during a period of five years. Investment trust gearing relates to total capital invested expressed in percentage terms of assets per security.

Finance, Corporations, Corporate finance

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Investment trusts: discounts may mislead

Article Abstract:

Investors should be careful of selecting an investment trust because it trades at a discount. The discount could continue for some time, and the market's view of the prospects for the sector or the manager will be reflected in the price. Discounts should not be the main factor when selecting a trust, though they are important. Higher returns are likely to be associated with greater risk levels. This is especially true for trusts involved in a single country.

Analysis, Risk (Economics)

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