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Investment trust |
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Investment trustA company quoted on the London Stock Exchange which invests its shareholders' funds in the shares of other companies.Points to note about investment trusts are:They enable private investors with limited funds to get diversified share ownership and without incurring heavy dealing costs.They enable investors to get exposure to markets that they may not be able to reach themselves (e.g. to emerging countries). Different trusts also have differing objectives (e.g. growth or income).They enable investors who don't have the skill or inclination to invest directly in companies to get the advantage of professional fund management (although see point below 6)It is easy for investors to drip-feed money into investment trusts over time by using a monthly savings plans.Unlike unit trusts, investment trusts are closed end funds. That is, there is a fixed number of shares in circulation, and the price of those shares is determined like other quoted shares - by supply and demand. This means that IT shares often trade at a discount to their Net Asset value (i.e. the value of their underlying investments) and it also makes IT shares more volatile than unit trust prices.ITs are actively managed funds which try to produce total returns better than the market average. However once management charges are taken into account, they often fail to meet this target. Hence the move by many investors to passive funds - trackers and index funds - which have lower charges.Similar MatchesInvestment incomeInvestment incomeIncome, paid from an investment, such as dividends and interest. Future investment opportunitiesFuture investment opportunitiesThe identification of additional, more valuable, investment opportunities in the future that result from a current opportunity or operation. Real Estate Mortgage Investment Conduit (REMIC)Real Estate Mortgage Investment Conduit (REMIC)A pass-through tax entity that can hold mortgages secured by any type of real property and can issue multiple classes of ownership interests to investors in the form of pass-through certificates, bonds, or other legal forms. A financing vehicle created under the Tax Reform Act of 1986. Investment businessInvestment businessThe Financial Services Act 1986 defines investment business to include dealing, arranging deals in, managing and advising on investments in addition to the setting up and operation of collective investment schemes. Diversified investment companyDiversified investment companyAn investment vehicle such as a mutual fund that invests in an assortment of securities. Further Suggestionsinvestment gradeTradepoint Investment Exchange Brown field investment Investment Company Institute (ICI) Net investment Investment history Guaranteed investment contract (GIC) Foreign investment risk matrix (FIRM) Personal Investment Authority Investment philosophy Investment Advisers Act Association of Unit Trusts and Investment Funds Investment certificate Investment management Investment advisory service Short term investment services Registered investment adviser Investment Net investment income per share Investment Management Regulatory Organisation Overinvestment Reinvestment effect Alternative investments Investment Company with Variable Capital Direct Foreign Investment |
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