Thursday 6 May 2010

How do I invest in an Investment Trust?

Question
How do I buy shares in an Investment Trust?Answer
Investment trust shares are traded on the stockmarket so you’ll need to buy them via either a stockbroker or an investment trust share dealing scheme.

If you want to buy and sell investment trusts from different companies then online stockbrokers tend to offer the most convenience and cheapest deals, at around £10 per trade. If you want to hold the investment trust within an individual savings account (ISA) then most stockbrokers will charge an annual fee for the ISA ‘wrapper’, but a few offer this free of charge – see the answer to this question for more details.

The investment trust share dealing schemes (often called ‘share plans’) offered by the investment trust companies usually only allow dealing in their own trusts. Some offer free purchases, while others might end up costing more than a stockbroker when investing lump sums. Nevertheless, these plans are usually the most cost effective option if you want to invest monthly. You can view a full list of these plans in the Association of Investment Companies (AIC) monthly statistics publication.

The exception to this is when an investment trust launches (called an initial public offering - 'IPO'), in which case the shares may also be offered through some financial advisers.

Read this Q and A at http://www.candidmoney.com/questions/question198.aspx

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