How to buy

You can buy into Investment Trusts directly from J.P. Morgan through the J.P. Morgan Share Plan, Saving for Children scheme, or the J.P. Morgan ISA or Pension Account. You can start investing from just £50 upwards. More on how to invest with us

Alternatively, you can buy through a stockbroker or independent financial adviser. To locate a stockbroker, visit the London Stock Exchange website.

How Investment Trusts work

Investment trusts are public limited companies (plcs). They have a fixed number of shares, which are traded on the London Stock Exchange like any plc. Investment Trusts pool together investors’ money and employ a professional fund manager like J.P. Morgan to invest in the shares of a wide range of other companies.

This allows individuals with relatively small amounts of money to gain exposure to a diversified and expertly managed portfolio of shares – spreading the risk associated with investing in the stock market.

You become a shareholder in the Investment Trust company, so you have a voice and voting rights – as well as a share of the company’s profits. This takes the form of an annual dividend, although this dividend is not guaranteed.

Every Investment Trust has an independent board of directors who look after the interests of the shareholders.

Points to consider

• Pricing by demand – as there is a fixed number of shares available in an Investment Trust when it is first created, it is said to be ‘closed-ended’. The share price is determined by the number of buyers and sellers wishing to trade in the trust on the stock market, and is therefore usually slightly above or below the net asset value (NAV) of the trust (see discounts and premiums below).
• Discounts and premiums – an Investment Trust’s share price is driven by market demand, so the shares can be worth more or less than the value of the trust’s underlying portfolio of assets. When shares are priced below the NAV, they are said to be ‘trading at a discount’. When they are trading above the NAV, they are ‘trading at a premium’.
• Gearing – lnvestment Trusts can borrow money to buy more assets. This gearing can potentially increase the returns made on behalf of shareholders. However, when markets fall, gearing can also increase the potential for losses within the investment portfolio.
• Different share classes – some Investment Trusts issue different classes of shares to meet different investors’ needs. These can take place within a conventional Investment Trust vehicle, or within a split capital Investment Trust (‘splits’). Here, different classes of shares have varying rights and entitlements within the trust.

Keeping track of your Investment Trust

• Online – visit the Fund Explorer of this website and select the Daily Prices or Fund Valuation Tool tabs. You can also register for online services in the Manage your account area. This allows you to keep track of your investments.
• By post – every six months we’ll send you a statement showing you the value of your funds.
• In newspapers – daily share prices are listed in the Financial Times, The Times, The Daily Telegraph, The Independent and The Scotsman.

Charges

Investment Trusts are very attractively priced compared to other collective investments, with low annual fees and transaction costs.

Typical costs include:

• Annual management fees – The cost of managing the trust is taken directly out of the trust’s assets, not each investor’s holding. Fees and other costs may typically amount to 1% a year.
• Bid-offer spread – Our Investment Trusts do not levy an initial charge. However, at any one time there may be a difference between the buying price and the selling price of an Investment Trust share, known as the ‘bid-offer spread’.
• Dealing costs – Like all publicly traded shares, there is a dealing cost when shares are bought and sold. If you buy through us, this is 1% (max £50 per deal) plus VAT, or 0.3% plus VAT for the Pension Account.
• Stamp duty – Government stamp duty of 0.5% is currently payable on share purchases only, not on sales of shares.