Investment trusts have the same aim as unit trusts i.e. to buy in bulk, shares in multiple companies. The difference is in the structure.
A unit trust can only take capital from investors to buy shares and the fund price is directly derived from the value of the share portfolio which the fund has bought.
An investment trust is itself a publicly listed company (plc) with all of the benefits that a company has including the borrowing of capital. The investment trust's fund price is effectively the share price of the company which owns the share portfolio. The fund price is, therefore, more loosely related to the price of the shares in the share portfolio and can be magnified by using borrowed capital to buy more shares to enhance the investment trusts' fund price.
There are a couple of more exotic investment trust structures:-
A split capital investment trust will issue different classes of shares to investors and the investor can choose which class of shares he wants to invest. The different classes of shares could pay out capital growth and dividends, or just dividends, or just capital etc.
A real estate investment trust is an investment trust which invests in property rather than company shares.
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