Five reasons you may benefit to buy investment trusts as part of an ISA


Buying investment trusts for an ISA is something that investors may not commonly consider, but Schroders provides five reasons why it may be wise to do so:

Inflation is on the rise

According to statistics from the Association of Investment Companies, investment trusts have beaten their benchmarks more frequently than open-ended funds over the medium and long-term.

Steady income

Investment trusts can deliver a steady income to investors, even in times of crisis because they can hold back up to 15% of their dividends during bumper years to keep reserves for any tough times that lie ahead.

Wide choice of flexible investments

Closed-ended investment companies are able to offer investors direct access to illiquid assets, such as property, infrastructure and private equity.

The other reasons focus on the notion that investment trusts are low cost due to independent boards that keep a close eye on them and ensure they remain at satisfactory levels.

Lastly, investment trusts are suited to holding for the long term in a wrapper such as an ISA as they have a fixed number of shares in issue and not subject to forced selling.

Looking to understand investing? Access our free digital libary, featuring hundreds of tips, articles and definitions.Click Here