Spotlight on Investment Trusts

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Spotlightoninvestmenttrusts

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4BACK TO BASICS All you need to know about investment trusts; what they are and how they work

Spotlight on Investment Trusts

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92011 AND BEYOND It’s been a busy year for investment trusts. Here we outline the changes and look to the future

REGULAR VS LUMP SUM INVESTING Moneywise weighs up the pros and cons of both approaches to investing

INVESTMENT TRUST AWARDS 2011 We recap on the winners and runners-up in each category, and the ones that deserve a closer look

Here at Moneywise, we don’t feel investment trusts get the attention they fully deserve. Like the popular kids at school, who manage to excel in the classroom, on the sports field and stage alike, investors and IFAs love unit trusts. But while, like the less popular kids, investment trusts go unnoticed by many – their school reports tell a different story. While the average fund size of unit trusts is £236.6 million, compared to £167.7 million for investment trusts, according to Lipper, bigger isn’t necessarily better. Average total expense ratios (including performance fees) for investment trusts are 1.53%, compared to 1.68% for unit trusts. Performance figures from Morningstar show that £1,000 invested 18 years ago would have grown to £3,074 in an average UK fund, compared to £4,918 in the equivalent UK Growth investment trust.

Read on to find out why you should consider investment trusts: from a basic guide explaining what they are and how they work, to a look at what has been happening in the investment trust world this year. We also debate the pros and cons of regular investing and lump sum investing – the latter could reap higher long-term returns but the former tend to do better during volatile times. Finally, for your convenience, we recap the winners of our Investment Trust Awards held in April.

SPOTLIGHT ON INVESTMENT TRUSTS | MONEYWISE 3