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Financial Times Guide to Investment Trusts by John C Baron

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2

Better performance and cheaper fees

It is a little known fact that investment trusts have not only performed better than unit trusts or their benchmarks, but have also beaten their ‘mirror’ funds – their unit trust equivalents run by the same trust manager. The key, but not the only, reason for this is cheaper fees.

Better performance

With open-ended funds dominating the retail market, you would have been forgiven for thinking that unit trusts and open-ended investment companies (OEICs) were the best collective investment vehicles in town. But you would have been wrong. History shows that investment trusts have soundly beaten the performance of their open-ended cousins over the longer term.

As you can see from Figure 2.1, financial advisory ...

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