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Reviews By Richard Berry - Updated
To buy an investment trust you need an investment trust investment account like AJ Bell, interactive investor or Hargreaves Lansdown. In this guide, we will explain what an investment trust is, how they work, how you can pick the best ones and highlight where you can buy them.
| Name | Logo | Investment Trusts | Account Fees | Dealing Commission | Customer Reviews | CTA | Feature | Expand |
|---|---|---|---|---|---|---|---|---|
 | Investment Trusts 449 | Account Fees 0% – 0.25% | Dealing Commission £3.50 – £5 | Customer Reviews | See Offer Capital at risk | Features:
| Hargreaves Lansdown Investment Trust Investing: Excellent investment trust research and analysis Account: Hargreaves Lansdown Investment Trust Investing Description: To help you navigate the investment trust market, Hargreaves Lansdown provides trust research, data and analysis and the research team regularly reviews and provides updates on their clients’ most popular holdings. How much does Hargreaves Lansdown charge for investment trusts? Despite it’s reputation for being expensive Hargreaves Lansdown is actually free for buying and selling investment trusts. But the ongoing account charges can rack up if you have a large portfolio compared to other providers like Interactive Investor and AJ Bell. *There is no charge for buying and selling investment trusts. Fund accounts are charged at 0.45% for the first £250,000. Then 0.25% up to £1m, 0.1% up to £2m. There is no charge above £2m. Pros
Cons
Overall4.8 | |
 | Investment Trusts 300 | Account Fees £0 | Dealing Commission £11.95 – £5.95 | Customer Reviews | See Offer Capital at risk | Features:
| Interactive Investor Investment Trust Investing: Fixed-fee investment trust investing Account: Interactive Investor Investment Trust Investing Description: Interactive Investor won best fund broker in our 2024 awards. Their Super 60 investments, ACE 40 ethical list and Model Portfolios include a range of investment trusts and they publish a regularly updated list of the most popular investment trusts on their platform. Does Interactive Investor have a good range of Investment Trusts? Yes, Interactive Investor has a wide range of investment trusts, and they regularly update the most popular trusts with their customers which can help picking which ones to invest in. II has a long association with the investment trust market. Investment trusts are closed-end funds that follow a specific investment mandate. Investment trusts are listed on the stock exchange and their shares trade in the same way that other stocks do. However, unlike open-ended funds such as ETFs, the value of the shares in an investment trust are driven by the supply and demand for the shares in the trust rather than the values of the underlying investment. That said investment trusts typically trade and are valued at a premium or discount to the NAV or Net Asset Value of those underlying investments. You can invest in as many investment trusts as you wish. Though most investors will try to select the best funds in a particular space or theme. II provides plenty of information about the best-performing Investment trust over various times frames and which funds have proven most popular with II clients, and articles on the sector and investing in it. *Investment trust fund dealing commissions are a free trade every month, then charged £7.99 or upgrade to a £19.99 “Super Investor” account 2 free monthly trades and deal for £3.99. Regular investing is free. Pros
Cons
Overall5 | |
 | Investment Trusts 84 | Account Fees £59.88 | Dealing Commission £3.99 | Customer Reviews | See Offer Capital at risk | Features:
| AJ Bell Investment Trust Investing Review: Best for low-cost investment trust investing Account: AJ Bell Investment Trust Investing Description: AJ Bell offer the most investment trusts on their platform of which their investment specialists have analysed the investment trust market, looking at factors including price, performance and size to create a list of 20 investment trusts to get started. Is AJ Bell good for investment trusts? Yes, AJ Bell offers access to over 400 investment trusts, but they also have an “Investment Trusts Select List” that has whittled those down to 18 of the best based on price, performance and size. *Investment trust account fees reduce to 0.10% on the value between £250,000 and £500,000. There is no charge above £500,000. Dealing costs are £1.50. Pros
Cons
Overall4.1 |
❓ Methodology: We have chosen what we think are the best investment trust accounts based on:
- over 30,000 votes and reviews in our annual awards
- our own experiences testing the investment trust accounts with real money
- an in-depth comparison of the features that make them stand out compared to alternative investment trust accounts.
- interviews with the investment trust accounts CEOs and senior management
What is an investment trust?
Investment trusts are a fund structured as a company listed on the stock exchange, which you can buy and sell like stocks and shares.
Investment trusts are the oldest type of investment fund and the favoured choice of many professionals and investment connoisseurs.
They are also known as investment companies, which is, strictly speaking, a more accurate description, since that is what they are – public companies whose sole purpose is to invest money provided by their shareholders.
For practical purposes you can use the two terms – investment trust and investment company – interchangeably.
Investment trusts versus open-ended funds
While investment trusts are not as popular – there is four times as much money invested in open-ended funds – they tend to invest in a wider range of asset classes, have more accountability and on average deliver superior performance over time.
Investment trusts are somewhat more complicated to understand than their fund cousins (unit trusts and OEICs), to which they are frequently compared. But that is offset by other advantages. That is why many City professionals prefer them.
The main differences between investment trusts and open-ended funds are:
- Structure
- Pricing and valuation
- Types of investment
Structure of investment trusts
Investment trusts are companies, listed on a stock exchange, with a board of directors who are legally accountable to its shareholders.
Although it has become easier in recent years for trusts to grow by issuing new shares, the amount of capital managed by trusts is generally fixed, whereas with open-ended funds the amount of capital varies directly from day to day in response to supply and demand.
Open-ended funds have an Authorised Corporate Director, an independent firm which has a duty to make sure that the fund is doing what it said it would do, but there is less direct accountability than with a trust, where shareholders can – at least as a last resort – vote out the board of directors.
Investment companies, unlike open-ended funds, also have the ability to borrow money in an effort to enhance returns.
Pricing and valuation of investment trusts
While all types of fund value their investments on a regular basis, the price you will get for buying or selling a holding in a unit trust or OEIC is closely and directly linked to the reported asset value of the fund, less a small adjustment for the cost you pay to make the transaction.
With investment trusts, by contrast, the price you will see each day is based on supply and demand for the shares in the trust.
The price of the shares can differ quite significantly from the reported asset value, leading to greater price volatility. Boards of trusts can choose to introduce discount controls to avoid this.
Types of investment made in investment trusts
Because their capital structure is mostly fixed, investment trusts can invest more easily in certain types of investment that open-ended funds are either barred from or refuse to consider.
This is particularly true of relatively illiquid assets, such as factories, private equity and rarely traded debt instruments. Although there are a number of open-ended property funds, it is not optimal to own these types of investment in an open-ended fund.
As investors in open-ended funds are entitled to ask for their money back in full at any time (”redeem their units”, in the jargon), it can cause problems if the assets are not easy to sell quickly.
Because they are not forced to return money on demand, investment trusts have greater freedom to invest in these areas.
How do investment trusts work?
According to academics at the Cass Business School in London, in pioneering research published in 2018, the most likely reason is that the fund managers of an investment trust, unlike managers of open-ended funds, benefit from not being obliged to buy and sell shares purely to satisfy changes in investor demand.
The ability to borrow money to enhance returns is another factor, but a relatively minor one. On average – and NB it is only on average – investment trust managers demonstrate greater skill, the academics concluded.
How many investment trusts are there?
There are some 400 trusts open to UK investors, according to the Association of Investment Companies (the AIC), the industry trade body. Of these around the great majority are listed on the London stock exchange.
The AIC classifies investment trusts into broad sectors, 11 for conventional equity trusts and another 12 for alternative asset trusts. You can find a guide to these sectors here.
You can download a table of the largest trusts and biggest management companies from the AIC website.
What are the most popular types of investment trusts?
Investment trusts broadly fall into two categories:
(a) conventional trusts
(b) alternative assets.
The first group would be recognizable to their Victorian pioneers, as they invest solely or primarily in publicly listed stocks and shares.
The second group has been the faster growing in the last five years and includes a wide range of different kinds of investment, such as commercial property, private equity, renewable energy, infrastructure and debt.
Alternative asset trusts have proved particularly popular in recent years because of their ability to pay attractive dividends, well above the miserly income (or yield) available from government bonds and savings accounts. The two groups are now about equal in size.
How can I tell what an investment trust is trying to do?
All trusts have to publish a prospectus, a detailed legal document, before their shares can be traded on the stock market.
One of the job of the broad of directors is to agree the basic investment objective of their trust and make sure that it is adhered to, until or unless shareholders agree to make a change.
The strategy of most trusts can be understood from their names, but others are not so obvious.
A full list of trusts can be seen on the AIC website, which has an interactive tool to allow you to sort all trusts by sector, name, size and so on.
What information do I need to know about investment trusts?
Before buying shares in an investment trust, be sure to read the most recent Annual Report and the factsheets that every trust is required to issue each month, summarizing its strategy, top ten holdings and recent performance.
Study the accounts, look at the trust’s rating and longer term track record, as well as whether it is using gearing (borrowing) in order to enhance its returns. Ask if the board have a discount control mechanism in place.
Read the fund manager’s commentary, what the media have been saying, and any research you can lay your hands on. Try to understand the type of conditions in which the trust does well and those in which it does less well.
Where can I find the best research on investment trusts?
Finding high-quality research about investment trusts is difficult. A number of stockbroking firms regularly produce research on trusts, but they are prohibited by regulations from issuing buy and sell recommendations to private investors, except to their most knowledgeable clients.
In order to fill this gap, a number of research firms now produce sponsored research notes for individual investment trusts. These can provide useful background information, but inevitably suffer from a perceived lack of independence.
These are the three most prominent suppliers of sponsored research:
What are discounts and premiums in investment trusts?
When the shares of investment trusts trade at a price below their reported net asset value, they are said to be trading at a discount.
When the share price is higher than the reported net asset value, the trust is said to be trading at a premium.
Nobody should invest in an investment trust unless they understand the concept of discounts and premiums and the circumstances in which these can change.
Which type of investment trusts do best?
Over a period of years the trusts which invest in riskier investments are the ones that should in theory deliver the best performance – and in practice that is often the case.
Trusts that invest in smaller company shares, for example, have generally done better than those which invest in blue chip stocks. Emerging markets have done better than developed markets, and so on. But these superior performers tend also to be the ones in which you can lose the most money over shorter periods of time.
It is the old rule: risk and return usually go hand in hand.
Which investment trusts have been the best performers?
In absolute terms, the best performing investment trusts over the past 1, 3,5 and 10 years can be found from most research websites and platforms.
As with all types of fund, the types of trusts that are top of the list will change from year to year.
Over the last ten years, for example, private equity funds have been the best performers, but they were also the worst hit during the financial crisis of 2007-09, most of them losing more than 50% of their value.
It is therefore vital to understand the risk characteristics of trusts as well as their style of investment.
Are investment trusts cheaper than open-ended funds?
They certainly used to be. That was mainly because, while their fees for managing the fund were in line with unit trusts and OEICs, investors in trusts have never paid commission to brokers and other intermediaries to help attract investors.
Nearly all open-ended funds used to do that, until the practice was outlawed by the City regulator, the Financial Conduct Authority in 2013. Now the fees on both types of fund are broadly similar on average, albeit with notable exceptions. Management fees have been falling in recent years.
The AIC funded a useful survey showing which platforms are able to hold investment trusts and their cost.
Does anyone rate investment trusts?
Yes, a number of research businesses analyse trusts and give them ratings.
These are among the best-known:
- Morningstar
- Trustnet
- Citywire
- Financial Times
Some give star ratings, others categorise trusts by letters (AAA being the best). Be careful though: a recent study by the Financial Conduct Authority found little evidence that trusts with good ratings do consistently better than average. Most ratings are based to a larger or smaller extent on extrapolating past performance, which is dangerous.
However looking at ratings can be a useful way to do an initial screen of trusts to own. Some online platforms also offer Best Buy lists. According to the FCA, best buy lists do appear to have some value.
How can I pick the best investment trusts?
It is not easy. In practice you need a combination of good research, an understanding of the fund manager’s process and commitment, careful analysis of the fund’s past performance and a degree of good fortune.
Because they have been around for so long, some trusts have been able to build a long term reputation for reliable performance.
More than 20 trusts, for example, have increased their dividend each year for more than 20 years, taking advantage of an investment trust’s ability to put aside some of their profits each year as a reserve to help them smooth out dividend payments, a feature that income-seeking investors in particular like. Open-ended funds do not have this ability.
But past performance really is a poor guide to the future. Only if you can understand why and when a particular trust has done better than its benchmark are you likely to have any chance of judging whether and when it will do well in the future.
Changes in gearing and discounts can make a big difference form one period to the next. As boards sometimes change their managers if their performance falls short of what they are expecting, trusts with long-serving managers can be a source of comfort.
Unfortunately most private investors do in practice seem to look primarily for trusts which have done well in the most recent periods.
Which media cover investment trusts best?
You will find the fullest coverage in specialist publications, some of which also run model portfolios:
- Citywire Investment Trust Insider
- Investors Chronicle
- Money Observer
- Money Week
- Investment Trusts newsletter
John Baron, a former City fund manager, who writes articles about investment trusts for the Investors Chronicle, also has an excellent website where subscribers who pay around £200 a year can see a range of portfolios he runs for different kinds of investors and the changes he makes to them.
Further reading on investment trusts:
- FT Guide to Investment Trusts, by John Baron
- The Investment Trusts Handbook, edited by Jonathan Davis
Best Investment Trusts to buy for 2025
Hargreaves Lansdown have highlighted five investment trusts to their clients for 2025 which they believe should be held for five years. We give our view on each of them in this guide to the best investment trusts of 2025.
A unique part of the UK investment landscape is the presence of Investment Trusts (IT). ITs are funds that invest in other companies. Investment Trusts (IT) are funds that pool capital to invest. Sponsoring and managing these ITs are big fund management companies such as Fidelity, JP Morgan, Aberdeen etc.
Many ITs are closed-ended. This mean that the number of shares of an IT remains static for a period of time. For most ITs, you can readily trade their shares during a business day. But the bid-ask spread will probably vary depending on the size and liquidity of a trust.
For example, you subscribed to an IPO of an investment trust. Three years later you wish to sell. Most likely you will be selling the shares to other buyers at the prevailing market price and not back to the trust. The original capital stays with the trust.
The first thing to find out about an Investment Trust is: What does it do?
One of the largest ITs in the UK, the Scottish Mortgage Trust (SMT), states this investment objective in its factsheet: “Scottish Mortgage is an actively managed, low cost investment trust, investing in a high conviction, global portfolio of companies with the aim of maximising its total return to its shareholders over the long term.“
In other words, SMT invests in global securities and is unconstrained by geographical limits. Because it invested in US FAANGS stocks, it has in the past outperformed FTSE by a wide margin.
Other trusts may have a more narrow focus, such as capitalisation-, sector-, or country-based. For example, the Fidelity China Special Situations (FCSS) invests solely in chinese-related securities while City of London (CTY) focuses on UK stocks.
Make sure you understand what the trust is trying to do – and its suitability to your own investment goals.
Smithson Investment Trust
The Smithson investment trust focuses on innovative small and mid size companies from developed markets across North America and Europe. Indeed just under 50.0% of the fund is invested in US Small and Midcap equities, which can be more innovative and faster moving, than their large or mega cap peers.
As we noted when discussing Hargreaves Lansdown’s fund choices, US Small and Midcap stocks are expected to do well under Donald Trump and his America first agenda.
It’s quite opportunistic then that Smithson trades at more than a -10.0% discount to NAV, though that is below the 12 month average discount of -11.54%.
However, that is what you would expect to see with interest in small and midcap stocks picking up. And with the trust’s share price ralling by +9.0% over the last six months that looks to be the case.
Smihson’s investment remit is to provide shareholders with long term capital appreciation, so it’s not dividend payer and therefore not one for income investors.
The portfolio includes US tech names such as internet security firm Fortinet inc, and high-end European consumer discretionary brands like Moncler and Geberit.
If you are looking for diversification away from large cap equities, but still want exposure to the world’s leading equity markets then Smithson could be for you.
JPMorgan Emerging Markets Investment Trust
This investment trust invests in both large and small cap stocks from emerging markets around the globe. Emerging market investing is not without its risk, liquidity, volatility, macroeconomics, and geo politics are just some of the issues that confront any would-be investors.
A collective scheme such as this aims to dial down those risks somewhat, through diversification, the experience of the management team, and the convenience of a London listed vehicle that’s priced in sterling.
The JP Morgan Emerging Markets Investment Trust has been around since 1991 and has £1.40 billion of assets, but a market cap of just £1.19 billion.
Which puts it on a discount of -13.79% which is below the 12 month average discount of -11.81%.
The trust’s portfolio contains stocks such as Taiwan Semi, Tencent, Infosys, Samsung and Tata Consultancy. The Technology and Financial Services sectors account for 58.0% of the fund, and at a country level China, India, Taiwan and Brazil make up some 70.0% of the trust’s exposure.
The trust is up by +5.50% over one year, and +9.30% over five years.
The ideal scenario for the JPMorgan Emerging Markets Investment Trust would likely be a resurgence in the Chinese economy and a period of US dollar weakness. That doesn’t look to be on the cards immediately, however, the trust’s stock price could get a boost if Mr Trump’s talk of trade tariffs of 100.0% and more, is dialed back when he takes up office.
Personal Assets Trust
If you read the bio and the fact sheet for Personal Assets Trust it may sound familiar and that’s because it’s managed by the same people behind the Troy Trojan Fund, which featured in the Hargreaves Lansdown five funds for 2025 selection.
Indeed PAT, as it’s often referred to, makes use of the same four pillar approach to investment as the Trojan fund, with exposure to large established companies, government and index linked bonds, gold and gold related investments and cash.
The trust’s objective is capital preservation, and the portfolio is designed to perform in an economic downturn. So it could appeal to defensive minded investors or those who think the bull market we have enjoyed post Covid, will inevitably come to an end, and want to position themselves accordingly.
PAT trades on a very modest discount to NAV of -0.98%, it yields 1.13% and its stock price has risen by +17.75% over the last 5-years.
Not one for raging bulls but worth considering if you think the equity market has run far enough.
Capital Gearing Trust
Another trust that has capital preservation on its mind Capital Gearing takes a similar approach to the managers at Troy/PAT. Though in this instance the trust uses three “buckets” which cover risk assets, index linked bonds and dry powder.
The Risk assets bucket contains equity investments. However rather than hold stocks directly, Capital Gearing Trust invests in other trusts and funds that have equity exposure themselves.
Which means that Capital Gearing Trust can access assets that trade at discount, specialist investments, and the skills of other management teams.
The dry powder bucket contains a mix of cash, T-bills and short-dated bonds. And it’s this bucket that’s meant to provide stability and a measure of capital preservation during periods of market volatility or economic uncertainty.
Capital Gearing Trust trades on a -1.71% discount to NAV, which is inside the 12 month average discount of -2.20%, its stock price has risen by almost +9.80% over the last 5-years.
The portfolio is well diversified at a holding and sector level, but it’s worth being aware that some 63.0% of the trust’s assets hail from the UK, US and Japan.
Another trust that’s worth considering if you are looking to add defensive capabilities and a measure of downside protection into your portfolio.
Greencoat UK Wind
A trust that’s aimed squarely at the energy transition and the push towards renewable sources of energy. Greencoat UK Wind investment trust invests in on and offshore wind farms that are income producing. The trust aims to pay investors a sustainable dividend (in every sense) that rise in line with the UK RPI index.
As such its a distribution model, where income overrides capital growth, so investors shouldn’t expect too much in the way of share price appreciation.
In the recent budget Chancellor Rachel Reeves effectively removed some of the last barriers to greater on-shore wind farm development, in the UK.
And it’s been estimated that if the UK is to meet its 2030 net zero targets, then its capacity for wind power production will need to double, or even triple from its current levels.
Greencoat trades at a -19.15% discount to its NAV that’s well below its 12 month average discount of 13.94%.
Investors should be aware that NAV values for the trust are only set on quarterly basis and that trusts underlying assets could be considered as highly illiquid. Nor is the trust’s performance measured against any formal index or benchmark.
Over the last 5-years the trust’s share price has lost more than -15.0% though it has rallied by +1.50% over the last month.
This is very much a specialist investment trust that invests in a complex market. So if you dont have a handle on the economics of wind power generation here in the UK then tread carefully. That said it looks like a good way to get direct exposure to the sector.
⚠️ FCA Regulation
All investment trust accounts that operate in the UK must be regulated by the FCA. The FCA is the Financial Conduct Authority and is responsible for ensuring that UK investment trust brokers are properly capitalised, treat customers fairly and have sufficient compliance systems in place. We only feature investment trust platforms that are regulated by the FCA, where your funds are protected by the FSCS.
Richard Berry
This article contains affiliate links which may earn us some form of income if you go on to open an account. However, if you would rather visit the investment trust investment platforms via a non-affiliate link, you can view the product pages directly here:
