Investment Trust

An investment trust is an investment vehicle that pools investors’ money to invest in a fixed portfolio of securities.

Investment trusts provide a fixed number of shares for investors to purchase. They also provide distributions, interest, and other forms of capital appreciation to investors for a specified amount of time until the trust expires. Upon expiration, the portfolio is sold off and the investors are paid a principal amount based on the market value of the underlying holdings.

The underlying assets of an investment trust don’t change because the investment vehicles are unmanaged. As such, they have much lower fees than their more actively managed counterparts.