{"id":1503,"date":"2012-03-07T11:22:04","date_gmt":"2012-03-07T10:22:04","guid":{"rendered":"http:\/\/esmartproducts.co.uk\/?p=1503"},"modified":"2012-03-07T11:22:04","modified_gmt":"2012-03-07T10:22:04","slug":"investment-trusts-4","status":"publish","type":"post","link":"https:\/\/www.suretyfp.com\/wordpress\/?p=1503","title":{"rendered":"Investment trusts"},"content":{"rendered":"<p>Investment trusts are based upon fixed amounts of capital  divided into shares. This makes them closed ended, unlike the open-ended  structure of unit trusts. They can be one of the easiest and most  cost-effective ways to invest in the stock market. Once the capital has  been divided into shares, you can purchase the shares. When an  investment trust sells shares, it is not taxed on any capital gains it  has made. By contrast, private investors are subject to capital gains  tax when they sell shares in their own portfolio.<strong><!--more--><\/strong><\/p>\n<p>Another major difference between investment trusts and unit trusts is  that investment trusts can borrow money for their investments, known as  gearing up, whereas unit trusts cannot. Gearing up can work either to  the advantage or disadvantage of investment trusts, depending on whether  the stock market is rising or falling.<\/p>\n<p>Investment trusts can also invest in unquoted or unlisted companies,  which may not be trading on the stock exchange either because they don\u2019t  wish to or because they don\u2019t meet the given criteria. This facility,  combined with the ability to borrow money for investments, can however  make investment trusts more volatile.<\/p>\n<p>The net asset value (NAV) is the total market value of all the  trust\u2019s investments and assets minus any liabilities. The NAV per share  is the net asset value of the trust divided by the number of shares in  issue. The share price of an investment trust depends on the supply and  demand for its shares in the stock market. This can result in the price  being at a \u2018discount\u2019 or a \u2018premium\u2019 to the NAV per share.<\/p>\n<p>A trust\u2019s share price is said to be at a discount when the market  price of the trust\u2019s shares is less than the NAV per share. This means  that investors are able to buy shares in the investment trust at less  than the underlying stock market value of the trust\u2019s assets.<\/p>\n<p>A trust\u2019s shares are said to be at a premium when the market price is  more than the NAV per share. This means that investors are buying  shares in the trust at a higher price than the underlying stock market  value of the trust\u2019s assets. The movement in discounts and premiums is a  useful way to indicate the market\u2019s perception of the potential  performance of a particular trust or the market where it invests.  Discounts and premiums are also one of the key differences between  investment trusts and unit trusts or OEICs.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Investment trusts are based upon fixed amounts of capital divided into shares. This makes them closed ended, unlike the open-ended structure of unit trusts. They can be one of the easiest and most cost-effective ways to invest in the stock market. Once the capital has been divided into shares, you can purchase the shares. When&#8230;  <a class=\"excerpt-read-more\" href=\"https:\/\/www.suretyfp.com\/wordpress\/?p=1503\" title=\"ReadInvestment trusts\">Read more &raquo;<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"_links":{"self":[{"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=\/wp\/v2\/posts\/1503"}],"collection":[{"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1503"}],"version-history":[{"count":0,"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=\/wp\/v2\/posts\/1503\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1503"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1503"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1503"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}