Described by some as the City’s best-kept secret, but attacked by critics as complex and risky, the truth about investment trusts probably lies somewhere between the two.
They are collective investments that give you access to active management at lower management charges than you typically pay for unit trusts and OEICs. Supporters argue that their refusal to pay commission to financial advisers is one of the main reasons why they are less common than OEICs and unit trusts.
But these closed-ended investment vehicles do come with a level of complexity and risk that is simply not an issue for their open-ended counterparts. That said, on the whole their performance has been better than comparable unit trusts and ...