Investments  

Investment trusts’ gearing abilities make them 'clear winner'

IFAs have historically favoured open-ended funds over their closed-end investment company counterparts.

A survey published by the AIC in 2020 showed that there were six main obstacles touted by advisers as their reasons for avoiding trusts.

Issues with platforms and a lack of contact with asset managers were two of the main finds, while other issues included a lack of knowledge, a level of inertia among IFAs, research constraints and some firm and network-wide policies which restricted the use of trusts.

But advisers’ use of the vehicles has risen since the Woodford Equity Income Fund scandal and closure of many open-ended property funds during the pandemic led to the “love affair” with unit trusts being eroded.

sally.hickey@ft.com