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Investment trusts: first class investments

Why is the long-term performance record of the investment trusts sector so outstanding? Four factors may have the answer
Investment trusts: first class investments

Investment trusts represent a small portion of the funds industry but time and again research shows that they punch above their weight. The latest evidence shows that investment trusts have outperformed open-ended funds substantially over the long term, in most sectors. So if you haven't yet put an investment trust in your portfolio, for example, because you're more familiar with open-ended mutual funds, it's time to consider one. This special issue will give you plenty of ideas and recommendations.

Let's take a closer look at the evidence in favour of investment trusts. The Association of Investment Companies is the trade body for closed-ended investment companies, which includes investment trusts, offshore investment companies and venture capital trusts (VCTs). It commissioned research from Canaccord Genuity comparing the performance of the open and closed-ended fund sectors. Canaccord found that investment companies outperformed open-ended funds in 12 out of 15 sectors over 10 years, 14 out of 15 sectors over five years and 11 out of 15 sectors over one year.

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