Fund of the week: restoring trust in investment trusts

Investment trusts have had bad press since the split-capital trust debacle five years ago. But don't tar the whole sector with the same split-cap trust, says Peter Walls of Unicorn Mastertrust.

Investment trusts have had bad press since the split-capital trust debacle

five years ago. Unlike unit trusts, investment trusts are allowed to borrow money to boost returns. This works well when markets are rising, but can damage returns when they're falling as the split-cap trusts that were grossly over-leveraged found out to their cost (and that of the 25,000 investors who ended up losing more than £650m in the debacle).

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