Investment trust is a kind of collective investment. Trust usually has an investment portfolio (such as shares, although there are many different types of trust). His own shares are traded on the stock exchange.

So someone could invest in an investment fund, simply buying their shares (or even one share) on the market.

This approach can be very lucrative, but it doesn’t always go well. It depends, as in the case of any share, What The investor buys and How many They pay for it.

Here, however, there are a handful of reasons why placing money in investment trust can be a good idea for at least some investors.

1. Professional management

Many trust employs professional managers who make decisions regarding funds allocation. Legendary fund managers, such as Jim Slater, have achieved excellent phrases for their investors.

In each generation there are stars managers who can do well even on bad markets. However, there is a lot of evidence that many professional investment managers cannot even overcome the market for maintenance.

Despite this, I see the attractiveness of expert managers in some investment funds. Scottish Mortgage Investment Trust (LSE: SMT) has increased by 21% in the last five years, achieving worse results FTSE 100 index. However, over 10 years of Scottish mortgages 291%.

This reflects the robust concentration of managers on growth companies Tesla AND Nvidia.

2. Easier navigation in international markets

I would feel comfortable judging Tesla or Nvidia as an investor. They publish information for investors in English.

Despite this, directly buying American shares may include complications that are not necessarily created when buying shares at the London Investment Fund, which is the owner of such shares. American tax principles are one example for British investors – and can be a headache.

What if my goal was not the United States, but, say, Japan or Argentina?

From language challenges to various accounting practices, investing abroad can be a minefield. I think that the professional fund managers specializing in a certain market will probably understand it much better than me.

3. Diversification with a strict budget

Diversification is an crucial tool for risk management of each investor.

With a diminutive budget, which can be challenging because the minimum trade fees can add up.

But one part of the Scottish mortgage credit currently costs just over 10 GBP. This, in turn, effectively offers diversification of shareholders thanks to investment farms in almost 50 different companies based in countries, including Great Britain, the USA, China, Taiwan, France and Canada.

4. Access to private companies

One of these companies is SpaceX. In fact, this is currently the largest shares in the portfolio of the mortgage, which is 7.8% of the total fund.

Spacex is a private company, so it’s not uncomplicated to invest directly. A diminutive private investor with several hundred pounds for investing is very unlikely that he will be able to buy SpaceX shares.

Often, however, such an investor can gain exposure to such private companies by putting money into investment trust, which is owned by participation.

5. Some Trusty sell with a discount

Some shares sell with a discount to the sum of parts. This also applies to investment funds.

For example, the Scottish price of a mortgage campaign currently sells about 10% to the net assets with a discount.