Investment trusts can often allow access to some areas of investment that would otherwise be impossible. Mr Britton uses infrastructure as an example. Unit trusts can invest in the companies working on the infrastructure projects, but are subject to stock market fluctuations and other kinds of volatility that could affect the value of a company’s share. Investment trusts can invest directly in the infrastructure projects themselves, partially shielding the investor from some areas of market fluctuation.
The next steps will have to focus on adviser education. Between discounts, premiums, gearing and a limited supply of shares, investment trusts can be complicated entities. Mr Britton has conducting continued training both in person at events and meetings and through the AIC website, and even offers bespoke training to firms. “Really we take any opportunity to help advisers,” he says.
Advisers must recognise that investment trusts will likely play a beneficial role in most investors portfolios and should be examined accordingly. Though the incentive of a commission should, in morality, not have impacted their judgement before, it has no place now. While the current rate of expansion cannot realistically continue over the long term, it does not appear that it will slow down in the near future.
