INVESTMENT TRUSTS Meaning and
Definition
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Investment Trusts refer to a type of financial institution that pools funds from individual investors to invest in a diversified portfolio of assets such as stocks, bonds, or other securities. Also known as closed-ended funds, these trusts issue a fixed number of shares that are then traded on stock exchanges like regular company stocks.
Unlike mutual funds, investment trusts are traded on the stock market throughout the day and their share price is determined by supply and demand. This means that the share price may trade at a premium or discount to its underlying net asset value (NAV). Investment trusts are typically actively managed by professional fund managers, who make decisions on asset allocation and buying or selling securities in order to generate capital growth and income for their investors.
Investment trusts provide individual investors with access to diversified investment opportunities, as they can invest in a wide range of assets across various sectors and countries. They often offer expertise in specific sectors or investment strategies, allowing investors to tap into markets that may not be easily accessible to them individually.
Investment trusts also have a board of directors that oversees the management of the trust and ensures that the interests of the shareholders are upheld. Shareholders have the ability to buy or sell trust shares at their own discretion, which provides liquidity to investors who wish to enter or exit their positions.
Overall, investment trusts offer individual investors a vehicle to participate in diversified investment opportunities, access professional management, and benefit from potential capital growth and income.
Common Misspellings for INVESTMENT TRUSTS
- investment trust
- unvestment trusts
- jnvestment trusts
- knvestment trusts
- onvestment trusts
- 9nvestment trusts
- 8nvestment trusts
- ibvestment trusts
- imvestment trusts
- ijvestment trusts
- ihvestment trusts
- incestment trusts
- inbestment trusts
- ingestment trusts
- infestment trusts
- invwstment trusts
- invsstment trusts
- invdstment trusts
- invrstment trusts
- inv4stment trusts
Etymology of INVESTMENT TRUSTS
The word "investment trusts" originates from two separate sources. First, "investment" derives from the Latin word "investire", which means "to clothe or surround". In the financial context, it refers to allocating money with the expectation of gaining a profitable return. Second, "trusts" comes from the Old Norse word "traust", which means "confidence or reliance". Historically, a trust was a legal arrangement where assets were held by one party (the trustee) for the benefit of another (the beneficiaries). In the case of investment trusts, the term signifies the trust and confidence that individuals place in an entity to invest their assets for growth and income purposes.
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