What is an investment trust?

An investment trust is a company whose business is the investment of shareholder’s funds. The shares are quoted on the London Stock Exchange. They are ‘close ended’, which means that there is a fixed number of shares in issue so investment trust managers can invest for the longer term without worrying about daily inflows and outflows of money. The share price is determined by demand for the shares, which is based on the performance of the underlying investments. More on investment trusts