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Guide to Investment Trusts



    Concerns expressed by both investors and advisers in relation to issues such as gearing and discounts had been felt to be holding investment trusts back; the industry has attempted in recent years to become more transparent and help improve understanding

    This guide seeks to provide a re-introduction to investment trust, explaining why some believe gearing should be embraced, how to deal with discount and premiums, and how much improved data is now widely available on almost all investment trusts.

    Additional material for this guide has been supplied by Annabel Brodie-Smith, communications director at the Association of Investment Companies; Stephen Peters, investment trust analyst at Charles Stanley; and Simon Moore, research team leader and senior research analyst at Bestinvest.

    In this guide


    Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

    1. What’s the unique factor that makes the difference between investment trusts and investment companies?

    2. The average percentage gearing for investment trusts is what, according to Ms Brodie-Smith?

    3. How much of their income can investment trusts retain to pay out in future dividends?

    4. How many trusts does Mr Peters cite as providing enough liquidity for £500,000m of trades a day?

    5. What does Mr Moore suggest is a good analogy to explain the power of leverage?

    6. Which platforms do not at the time of writing support investment trusts

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