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Aberdeen has established a strong reputation for expertise in investment trusts. We now manage or advise on over £10.5 billion* of closed end assets worldwide. Many investors already have exposure to major stock markets through general trusts. Specialist investment trusts, such as those in the Aberdeen range, permit investors to diversify their portfolios by making investments in areas that may be difficult to access directly.
An investment trust is a company that invests in other companies. An investment trust may hold shares in a wide range of different companies at any one time. A trust typically holds 40-60 underlying stocks with no stock usually comprising more than 10% of the total portfolio.
Each investment trust is an independent company with its own Board of Directors who are responsible for setting strategy, monitoring performance and who are answerable to their shareholders. They employ professional investment managers who constantly monitor their investment universe, deciding what companies to invest in and when to buy and sell shares.
Investment trusts also benefit from their 'closed-ended' structure which enables the managers to take a long-term view of their investments rather than being obliged to hold cash in reserve to meet potential redemptions. Investment trusts are also capable of borrowing in order to finance further investments. The capacity for 'gearing' allows the investment manager greater flexibility to increase exposure to companies in market conditions they find favourable.
Some Investment Trusts, known as 'split capital trusts or splits', can issue more than one class of share, giving the investor the choice of higher than usual income or higher than usual capital growth within the same trust.
*Source: Aberdeen Asset Management as at 26 February 2010