Financial Dictionary.
This is a browseable and searchable reference tool for terminology
relating to UK-based personal finance and financial products.
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Investment Trust
Definition: Investment Trusts are companies that are listed on the UK Stock Exchange, and their business consists of investing in the shares of other companies. They are 'closed-ended', meaning that they have a limited number of shares in circulation. Like any other share, their prices are affected by factors such as sentiment, supply and demand, so the share price does not necessarily reflect their true underlying Net Asset Value. Shares usually trade at a discount or a premium. A major difference between Investment Trusts and Unit Trusts is that Investment Trusts are allowed to gear their portfolios, whilst Unit Trusts can only do this to a limited extent. See also Split Capital Investment Trusts.
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