Frequently asked questions

We have compiled a list of the most common questions we are asked about Investment Trusts.

  • An Investment Trust is a listed company with its Shares quoted on the London Stock Exchange. These are known as 'closed ended Funds' because investors buy and sell trusts from each other via the stock market and so they have a fixed amount of Shares available. This is in contrast to Unit Trusts/OEICs which issue or cancel units according to demand and are called ‘open ended Funds’.

    Investment Trusts invest in the Shares of other companies or in fixed-interest securities, unquoted securities or property. They have an independent board of directors who are responsible for looking after shareholders interests.

  • The Net Asset Value (NAV) is the total market value of all the trust’s investments and assets minus any liabilities. The NAV per share is the net asset value of the trust divided by the number of Shares in issue. For most trusts it is published every day on websites and in newspapers.

  • If the Share price of an Investment Trust is lower than the Net Asset Value (NAV) per Share, the trust is said to be trading at a discount. If the Share price of an Investment Trust is higher than the NAV per Share, the trust is said to be trading at a ‘premium’. The discount / premium is shown as a percentage of the NAV. It is more common for an Investment Trust to trade at a discount than at a premium.

  • Investment Trusts can take on debt (or borrowing) to buy investments if the manager expects stock markets to rise. This is known as ‘gearing’ and the idea is to make a greater return on the money borrowed than the cost of the borrowing. If markets rise, gearing can improve the trust’s profits but, if they fall, losses will be greater.

  • A dividend may be paid from the earnings declared by an Investment Trust. It will reflect the performance and dividend pay-out of the underlying investments. Hence the amount and frequency of dividend payments will vary between Investment Trusts. Investment Trusts also have the ability to withhold a proportion of income to build up cash reserves. These can then be used to supplement dividend payments in lean years.

  • You may already know exactly what you want to invest in. If so, we’ve made registering or logging in to our online service as simple as possible.

    You can find a plethora of information out on the World Wide Web. Willis Owen does offer an Investment Trust toolkit called : explore Investment Trusts, providing prices and charts for a range of Investment Trusts; however, you may also find the London Stock Exchange website as a useful source of information.

  • The buying process is simple. Once you have decided which stock you wish to buy:

    • In : invest summary, under the 'select an action' drop down, select Purchase Equity
    • Type in the name of the Share you would like to buy and select it from the drop down list
    • Enter the amount to invest and confirm you would like to proceed and press 'Get Price'
    • If your deal is within the market opening hours you will be given a firm quote (price at which to buy) with a 20 second countdown
    • If you decide to accept the quote within that time you will be taken to the Equity Trades page where you can see the cost breakdown. 
    • A contract note will be placed within the 'my documents' area confirming the trade details.

      Outside market open hours you can choose to place an order that will be dealt at 'best price' when the market next opens. 

      Share purchases are changed at normal online rates of just £7.50. See details of our full charges here.
  • The selling process is simple. Once you have decided which stock you wish to sell:

    • In valuation, select the Share you want to sell by clicking 'Sell'
    • Enter the quantity you want to sell and confirm you would like to proceed and press 'Get Price'
    • If your deal is within the market opening hours you will be given a firm quote (price at which to sell) with a 20 second countdown
    • If you decide to accept the quote within that time you will be taken to the Equity Trades page where you can see the cost breakdown. 
    • A contract note will be placed within the 'my documents' area confirming the trade details

      Outside market open hours you can choose to place an order that will be dealt at "best price" when the market next opens. 

      Share sales are changed at normal online rates of just £7.50. See details of our full charges here.
  • There is a minimum age of 18 to trade.

  • As with Shares you can trade during normal London Stock Exchange market hours – from 8.00am until 4.30pm, Monday to Friday (but not on Bank Holidays), and obtain live market prices. Outside these hours you can choose to place an order which will be dealt at ‘best price’ when the market next opens.

  • Yes, once you have successfully opened an account. If you want to buy Investment Trusts simply add monies to your account and you can place a trade straight away.

    : explore Investment Trusts is the name of our research tool that enables you to search and compare information, allowing you to thoroughly research existing or potential trusts for your portfolio. Once you know what you want to invest in we’ve made registering or logging in to our online service as simple as possible.

  • Yes. The minimum trade order is £100.

  • Investment Trusts can use borrowing to enhance returns, but this can magnify losses in a falling market. The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks. This website does not provide personal advice based on your circumstances. We aim to provide information and tools to help you make your own informed decisions.

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