AJ Bell: Trusts outperform equivalent fund 75% of the time

60% of the time trusts are also cheaper

Anna Fedorova
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Majority of investment trusts outperform equivalent funds over 10 years
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Majority of investment trusts outperform equivalent funds over 10 years

Research from investment platform AJ Bell has found investment trusts outperformed open-ended funds run by the same manager over a ten-year period three quarters of the time, with the majority also costing the investor less in management fees.

AJ Bell found the trusts run by the same manager were cheaper than the open-ended funds in 60% of cases, with the average funds it looked at costing 0.97% versus a 0.91% fee on trusts. However, AJ Bell warned investors should brace themselves for higher volatility in trusts as a result of their use of gearing - in fact, trusts are more volatile than their fund equivalents 90% of the time. Laura Suter, personal finance analyst, said: "There's been lots of talk recently about whether investment trusts or funds are the better vehicle for investors, so we decided to crunch the numbers on...

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