What are investment companies?

The basics

Investment companies are companies which invest in a diversified portfolio of assets. By investing in an investment company you gain access to a wider range of investments that you could normally buy yourself. Your investment is also managed by an expert fund manager. This investment process makes investment companies, like units trusts, a type of collective investment fund.

Investment companies invest in a wide range of different assets such as shares and securities of other companies that trade on the stock markets around the world, private equity, property, bonds etc. This means investment companies are not only able to offer you exposure to a range of companies but can also give you exposure to specific markets, industries or even small unlisted businesses which are at an early stage in their development.

There are over 400 investment companies, which include investment trusts, offshore investment companies, Venture Capital Trusts (VCTs) and split capital trusts, many of which have existed for more than 50 years.

The benefits