Investment Trusts 

Guide to using investment trusts in client portfolios

  • Describe the origins of investment trusts and learn how to unpack the jargon surrounding them.
  • Identify how to spot a good investment trust for clients.
  • List whether availability on platforms has helped to boost uptake by advisers.
CPD
Approx.60min
Guide to using investment trusts in client portfolios

Introduction

Adviser purchases of investment trusts on adviser platforms in 2018 reached £985m, according to figures released by the Association of Investment Companies this month.

As Ian Sayers, chief executive of the AIC points out: "Purchases of investment companies on adviser platforms are nearly five times higher than they were in 2012, the last year before RDR came into force.

"However, there is still more work for us to do in persuading advisers of the benefits of investment companies.”

Indeed, while advisers seem to be growing more confident about recommending investment trusts to their clients, there are still some in the advice sector who are yet to embrace these investment vehicles.

There are many reasons for this, but sometimes the jargon can be offputting, while lack of availability on adviser platforms in the past has been cited as another reason for advisers not to use investment trusts to invest clients' money.

The features in this guide will look at the history of investment trusts and will unpack some of the jargon surrounding these investment vehicles, including terms such as gearing, discount and premium.

Other features will consider how advisers can spot a good investment trust for client portfolios and finally, whether wider uptake of investment trusts by advisers has been helped by platforms.

This guide is worth an indicative 60 minutes of CPD.

Contributors to this guide: Udit Garg, head of wealth management at Sun Global Investments; Pascal Dowling, partner at Kepler Partners; James Budden, director of retail marketing and distribution at Baillie Gifford; Nick Britton, head of intermediary communications at the Association of Investment Companies; Alex Howe, head of investment trust sales at BMO Global Asset Management; Claire Dwyer, associate director for investment trusts at Fidelity International; Annabel Brodie-Smith, communications director at the Association of Investment Companies; Ian Sayers, chief executive of the Association of Investment Companies; Harry Stein, sales and marketing manager at Mobius Capital Partners; David Cornell, chief investment officer at Ocean Dial Asset Management; Matthew Burrows, chartered financial analyst and director of distribution at Frostrow Capital; Mike Wilson, head of sales at Janus Henderson Investors; Melissa Gallagher, co-head of investment trusts at BlackRock; Tim Morris, financial adviser at Russell and Co Financial Advisers; Fidelity International; Association of Investment Companies; the Lang Cat.

Saloni Sardana and Victoria Ticha are features writers at FTAdviser and Financial Adviser

In this guide

CPD
Approx.60min

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. Mr Dowling says investment trusts are what type of invention?

  2. By the end of the 19th Century, how many investment trusts were there in England?

  3. A "hefty" premium or discount may be sending a signal about what, according to Ms Dwyer?

  4. Ms Brodie-Smith says there are how many investment trusts that are more than 100 years old?

  5. Is the following statement true or false? "The board is there to agree with the fund managers and ensure corporate governance is upheld."

  6. Mr Britton names three platforms which are seeing particularly high volumes of investment trust purchases. Which one of the below is not one of those platforms?

Nearly There…

You have successfully answered all the questions correctly, well done!

You should now know…

  • Describe the origins of investment trusts and learn how to unpack the jargon surrounding them.
  • Identify how to spot a good investment trust for clients.
  • List whether availability on platforms has helped to boost uptake by advisers.

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