What is an investment trust?

An investment trust is an actively managed fund, with a fund manager investing in a portfolio of shares, property or other assets according to the objectives of the fund. 

Investment trusts can provide an excellent opportunity for portfolio diversification across geographical areas and market sectors, as well as more niche opportunities like private equity.

Benefits of investment trusts

Consistent income
Many investment trusts pay steady dividends due to their ability to hold back up to 15% of the income generated every year, to help top up income payments in leaner years.
Expert management
Investment trusts are overseen by a board of directors, which ensures that the fund is managed in line with shareholders’ interests.
Diversification
You have access to a wide range of assets with just one investment.
Long term strategy
Over the long term, investment trusts tend to outperform other funds.
Gearing
Investment trusts are allowed to borrow to invest (gearing), which can increase gains.

What to consider when investing in investment trusts

Costs

Investment trusts tend to be more expensive than ETFs, to account for the research and management costs.

Not being in charge

You can potentially lose some of your money if the fund manager doesn’t make the right choices.

Gearing

Gearing can bring a positive outcome; however, it becomes a risk if the borrowed money is not invested wisely.

Data protected

Like all funds, investment trusts can rise and fall in value. However, they can be more volatile than other assets due to supply and demand.

Most purchased investment trusts

The below table highlights the top ten investment trusts on Freetrade in 2021 by number of orders.
Data updated on the 27th May 2022. When you invest, your capital is at risk.

Rank

Investment trust

Ticker

1 Scottish Mortgage Investment Trust plc SMT
2 Greencoat UK Wind UKW
3 HydrogenOne Capital Growth HGEN
4 Seraphim Space SSIT
5 Baillie Gifford US Growth USA
6 Foresight Solar Fund FSFL
7 City of London CTY
8 Fidelity China Special Situations FCSS
9 Smithson Investment Trust SSON
10 Allianz Technology Trust ATT

List of investment trusts on Freetrade

What can I invest in?

See which are the most traded shares by the total value of buy orders over the past week on the Freetrade app.

US, UK and European stocks

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ETFs

Choose from a wide range of exchange-traded funds covering index funds, stock and bond ETFs from providers like Vanguard, iShares and Invesco, as well as HSBC and Xtrackers.

REITs

Diversify your investments with REITs, which allow you to add residential or commercial real estate assets to your portfolio without the hassle of buying and managing the properties yourself.

Investment trusts

Choose from over 150 investment trusts to diversify your portfolio across a wide range of sectors, geographical areas and markets worldwide.

Simple pricing plans

£0.00/mo

Accounts

GIA pink
General investment account

Benefits

  • Commission-free trades (other charges may apply. See full pricing table.)
  • Fractional US Shares
  • Access to more than 1,500 stocks, including the most popular shares and ETFs
£4.99/mo

Accounts

GIA white
General investment account
ISA
Stocks and shares ISA

Benefits
Everything in Basic, plus:

  • Full range of over 6,000 US, UK and EU stocks and ETFs
  • Automated order types
  • Advanced stock fundamentals
  • 1% on uninvested cash, up to a maximum of £2,000
NEW
£9.99/mo

Accounts

GIA white
General investment account
ISA
Stocks and shares ISA
SIPP white
Self-invested personal pension (SIPP)

Benefits
Everything in Standard, plus:

  • 3% on uninvested cash, up to a maximum of £4,000
  • Priority customer service
  • Freetrade Web beta

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When you invest your capital is at risk.