What is an Investment Trust?

An Investment Trust is a type of company that pools investors’ money to buy a mix range of investments in a professionally managed portfolio.

Experienced fund managers handle the day-to-day decisions for you. Researching markets, identifying opportunities, and adjusting the portfolio as needed.
 

How do Investment Trusts work?

Investment Trust companies are listed on the stock exchange, so you can buy and sell them just like other shares. The price will vary through the day depending on demand.

Why should I consider one?

Regular income

Can retain investment returns to 'smooth' income payments and maintain consistent income even when markets are volatile.

Long-term focus

The closed-ended structure allows managers to invest in less liquid or more specialist areas, like infrastructure or private equity.

Potential for higher returns but greater risk

Trusts can borrow money to invest more, a strategy known as gearing. This can boost returns when markets rise, though it also increases risk.

Portfolio Diversification

This offers exposure to many different assets with just one investment.

Please remember that the value of investments and the income from them can fall as well as rise, and you may get back less than you invest. If you’re not sure about investing, seek financial advice. There will normally be a charge for that advice.

Sound similar to funds?

Investment Trusts and funds both pool your money to buy a range of other investments but there are some key differences.

Buying and selling

Investment Trusts: are bought and sold on the stock market like shares. Their price can go up or down throughout the day depending on investor demand.

Funds: are priced once a day, and their price is based purely on the value of the investments they hold.

Special features

Investment Trusts: can borrow money to invest and keep some returns to ‘smooth’ the income they pay out to customers.

Funds: managers can’t borrow money or hold back returns.

Ready to invest?

It’s easy to find the right Investment Trust for you. Our Investment Trust Centre will help to get you started.

Visit Investment Trust Centre

Protecting your money

The Financial Services Compensation Scheme (FSCS) protects the eligible money you hold with us.

More about the FSCS

Protecting your money

The Financial Services Compensation Scheme (FSCS) protects the eligible money you hold with us.

More about the FSCS

You may also like

Understanding investing

Whether you’re new to investing or experienced, it’s always good practice to keep learning.

Learn about investments

Do your research

Find your next investment and catch up with market news or investment ideas.

Find your next investment

International trading

Take advantage of multiple international markets, with no trading commission.

International trading

Smart investing

Whether you’re starting out or a seasoned investor, we’ve got you.

Lloyds investing

Smart investing

Whether you’re starting out or a seasoned investor, we’ve got you.

Lloyds investing

Important legal information

The Lloyds Bank Direct Investments Service is operated by Halifax Share Dealing Limited. Registered Office: Trinity Road, Halifax, West Yorkshire, HX1 2RG. Registered in England and Wales no. 3195646. Halifax Share Dealing Limited is authorised and regulated by the Financial Conduct Authority under registration number 183332. A Member of the London Stock Exchange and an HM Revenue & Customs Approved ISA Manager.