Investment trusts are global equity portfolios that provide returns in the form of dividends and increased share value. Investment trusts are popular with investors in the United Kingdom.
Money from investment trusts is placed in collective equities across the world. The fund has a limited number of shares and in the UK they are managed by asset management companies. The first investment trust in the UK started back in 1868, and there are many trusts more than a century old.
Investment trust shares are publicly traded by the fund manager. These investments come in split capital trusts and real estate trusts.
Split Capital Investment Trusts are issued in “splits” that allow investors to choose shares that meet their needs. A trust of this type will have at least two share types from among the following: zero dividend preference shares, income shares, annuity income shares, ordinary income shares and capital shares. Splits are generally of limited duration lasting usually from five to 10 years.
Real Estate Investment Trusts (REITS) invest in real estate type assets. REITS can make money through equity, mortgage or a combination of equity and mortgage from these assets. Typically a company must pay at least 90 per cent of taxable income to investors annually.
Asset management companies offer investment trusts to the public. JP Morgan Asset Management is a renowned firm dealing in this field with the largest selection of investment trusts. They have managed funds for more than 130 years with a consistent performance level and a knack for developing new products. They are the largest investment trust manager in the United Kingdom with assets of more than £4bn in 2009.
Investment trusts provide a way of investing in a balanced and flexible way in equities across the globe using the services of experienced trust managers.
