This is essentially a listed firm that buys shares in other companies.

It aims to buy shares that do well and boost its own share price in the process. Unlike unit trusts however, investment trusts can borrow money to invest and “gear up”. An investment trust lists its own shares on the stock market which means that buyers and sellers have to trade with each other. The result is the shares can trade at a discount (below) or a premium (above) to the net assets held by the firm.

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