The Big Theme 

Top gear: how equity investment trusts are using borrowing

Top gear: how equity investment trusts are using borrowing

Investment trusts have some structural features that enable them to do things that open-ended funds cannot. This includes the ability to gear – borrow money to invest – so that they have more invested than the money they have taken from investors. This extra exposure has often enabled investment trusts to outperform similar open-ended funds that do not have gearing and relevant benchmark indices when these are rising.

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