Interactive Investor

Please remember, investment value can go up or down and you could get back less than you invest. The value of international investments may be affected by currency fluctuations which might reduce their value in sterling.

Investment trust ideas from our experts

Our Super 60 investmentsACE 40 ethical list and Model Portfolios include a range of investment trusts. Or get up and running with our Quick Start Funds.

What is an investment trust?

An investment trust works in much the same way as a fund. It's a way to invest in a range of companies without picking individual shares.

Like funds, trusts invest in a 'basket' of underlying assets such as shares, bonds or property. But unlike funds, they are structured as companies listed on the London Stock Exchange. Investors in a trust share in the capital gains (or losses) and in any income payments made. As a result, trusts have two values: the value of the investments held in the trust and its share price.

Why do people invest in trusts?

Investment trusts have various bells and whistles that investors can use to their advantage. These include ‘rainy day’ reserves, which have enabled the vast majority of trusts to weather the Covid-19 dividend drought. by either maintaining or increasing dividend payments to shareholders.

Investors can also pick up a potential bargain when a trust is trading on a discount. Performance can be supercharged in rising markets by 'gearing'.

Investment trust performance can involve rather more ups and downs than funds, because of gearing and the effect of movements in the discount. But if you're invested for the long term, it is not worth worrying too much about short-term swings.

Why choose interactive investor to buy investment trusts?

  • We offer the widest choice – more than 40,000 UK & global investment options, including over 600 investment trusts.
  • We charge a low, flat fee of £9.99 per month. Most other investment platforms charge a percentage fee that grows with your investments.
  • The £9.99 monthly fee includes our Stocks & Shares ISATrading Account and Junior ISA (add a SIPP for £10 a month).
  • We give you a free trade every month. There are also no trading fees with our regular investing service.

Latest investment trust news and insights

Ian Cowie: shares that yield an income pay investors to be patient

by Ian Cowie | 11th March 2021

Our columnist has received eight trust dividend cheques so far this year, boosting his 'forever fund'.

Funds Fan: UK small-cap share ideas and Scottish Mortgage

Fund, investment trust and ETF data. See the latest »

Best investment trusts for income

Investors looking for an investment trust that generates income should firstly consider UK equity income and global equity income trusts. These both invest in dividend paying companies, to produce an income for shareholders.

Other income options for investors to consider include commercial property and infrastructure.

One of the main advantages of an investment trust compared with funds is its ability to hold dividend reserves. We explain this in more detail below in the investment trust FAQs.

As a result, many investment trusts have impressive track records in growing their dividends year in, year out.

Trusts with increasing dividends

The most recent list of investment trust “Dividend Heroes” published annually (15 March 2021) by the Association of Investment Companies (AIC) shows that six trusts have now achieved increasing dividends for 50 years or more:

  • City of London Investment Trust (one of our Super 60 funds)
  • Bankers Investment Trust
  • Alliance Trust
  • Caledonia Investments
  • BMO Global Smaller Companies
  • F&C Investment Trust (one of our Super 60 funds)

There are 19 investment trusts that have raised dividends for more than 20 years in a row. This is slightly down on last year when 21 trusts were 'dividend heroes'.

The table below shows the 11 investment trusts that have increased dividends for 40 years or more. Most invest in global businesses that pay dividends. The remaining three investment trusts invest in dividend-paying shares listed on the UK market. Please note: figures correct as at 15 March 2021.

CompanySectorNumber of consecutive
years dividend increased
City of LondonUK equity income54
BankersGlobal54
Alliance TrustGlobal54
Caledonia InvestmentsGlobal52
BMO Global Smaller CompaniesGlobal50
F&C ITGlobal50
BrunnerGlobal49
JPMorgan ClaverhouseUK equity income48
Murray IncomeUK equity income47
Scottish AmericanGlobal equity income47
WitanGlobal46

New to interactive investor?

Open an investment account to invest in trusts. It takes less than 10 minutes to get started. 

Already an ii customer?

Log in to use our quickrank tool to find your next investment trust. There's over 400 to choose from.

Learn more about investment trusts

The value of your investments can fall as well as rise and you may not get back all the money that you invest. Please note the tax treatment of these products depends on the individual circumstances of each customer and may be subject to change in future.