Your investments are not guaranteed; they can decrease in value as well as increase and you may not get back the full amount you put in.
We provide an independent comparison service free of charge but we may receive a commission from some of the companies we refer you to. These are indicated with purple buttons.
Investment trusts offer the potential for good returns without much of the risk associated with more traditional equity based investments.
Investment trusts are often categorised with OEICs and unit trusts but they work in a different way.
Investment trusts work like an ordinary company in so much as they issue shares to raise money from shareholders and then invest that money.
However, rather than investing this money in physical assets, investment trusts companies invest their money in other companies, bonds and other securities.
An investment trust savings plan has a set number of shares. So, if you want to buy shares in an investment trust, you normally have to buy them from someone who already holds some.
A fixed interest investment trust invests your money predominantly in high yielding fixed interest securities such as government bonds and equity-like securities within fixed income markets. This makes it a less risky option, although there will still be some risk to your capital and growth.
Much of the investment trust performance comes from dividend income while some capital growth comes from capital appreciation generated by investments which have equity-related characteristics. This is why they are sometimes called ‘high interest investment trusts’.
There are various factors you should consider when undertaking a high rate investment trust comparison including:
A simple way to compare interest bearing investment trusts is to consider their income yield.
This shows the current or past investment trust performance and can help you establish which investment trusts have a good track record of high returns.
Bear in mind that not all high interest investment trusts are the same and some will invest a higher proportion in equities than others that are ‘safer’.
Secondly, you should compare the fees and charges for investing. You can expect to pay a charge when you buy and sell shares in an investment trust and you may make a small initial loss based on the difference between the ‘bid’ and ‘offer’ price of the shares.
You should also compare the annual management fees and other administrative costs charged by the fixed interest investment trust that you are considering.
By taking all of these factors into consideration when you compare investment trusts you should be able to find the best investment trust fund for your circumstances.
While the world of investments may seem like a murky place, shrouded in a blanket of financial terminology, placing your money in an investment trust could see your money grow at a rate that outpaces any savings account. Here's what you need to know.
Investment trusts: a good way to start your investment portfolio?
How to compare investment trust annualised returns
A revamped Right to Buy scheme offers council tenants in England up to £77,900 (or £103,900 in London) off the market price of their council home. Here is what you need to know about the scheme.
Many of us dream of building our own home and while it is not the right option for everyone, self building could be an affordable way for you to get your ideal property. Yet fail to plan properly and you face the risk of financial ruin.
If you've ever tried to buy tickets for a must see event, you'll know that it's not always easy to get them first time! If you're not quick you can easily miss out, but don't give up, there are still ways to get the tickets you want.