What are investment trusts?

Investment trusts are investment funds that raise capital through public ownership and are structured to invest in a diversified portfolio of assets. They allow multiple investors to pool their money together, which is then managed by professional fund managers. This structure creates an opportunity for investors to gain exposure to a broad range of investments—such as stocks, bonds, or real estate—while diversifying their risks across different assets.

The public ownership aspect is significant because it enables individual investors to participate in markets they might not be able to access on their own. Furthermore, investment trusts typically trade on stock exchanges, providing liquidity to investors.

This choice highlights key features of investment trusts, such as their collective nature, the professional management involved, and their focus on diversification. It addresses how investment trusts serve as vehicles for investors to gain broader exposure to various asset classes without requiring direct purchases of individual securities.