investment trust


investment trust
= investment company
A company that invests the funds provided by shareholders in a wide variety of securities. It makes its profits from the income and capital gains provided by these securities. The investments made are usually restricted to securities quoted on a stock exchange, but some will invest in unquoted companies. The advantages for shareholders are much the same as those with unit trusts, i. e. spreading the risk of investment and making use of professional managers. Investment trusts, which are not usually trusts in the usual sense, but private or public limited companies, differ from unit trusts in that in the latter the investors buy units in the fund but are not shareholders. Some investment trusts aim for high capital growth (capital shares), others for high income (income shares). See also accumulation unit; split-capital investment trust; unitization

Big dictionary of business and management. 2014.

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