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Investment trusts will play second fiddle no more

Investment Concept
By Alice Cho
22 August 2023
Corporate Reputation
Financial Communications

Imagine investment trusts as the talented musicians who never quite made it to the mainstream, not for lack of skill, but because they were too busy honing their craft while the one-hit wonders hogged the spotlight.

Investment trusts have quietly existed in the UK since the Victorian era. However, they often find themselves being overlooked in favour of the more widely promoted open-ended funds – their more accessible and simpler counterpart.

These investment trusts, in their distinctive structure as public listed companies on the LSE, boast a count of over 450, representing a combined market capitalisation of $320 billion. A grand ensemble, indeed.

Yet, this impressive presence has not translated into a chorus of recognition; rather, their voices are muffled by the louder PR campaigns from the open-ended funds.

According to a recent note published by Stifel, the investment trusts sector has derated from an already wide average discount of 13% to 16%. This markdown, the widest since the 2008 Financial Crisis, opened the door for investors to seize assets at a bargain.

The million-dollar question then becomes: which investment trusts will seize the opportunity, while others remain hidden in the shadows?

Investment trusts are merely another financial product; they are unique brands with their own story to tell. The hitch, however, lies in their passive storytelling, failing to step into the limelight they so rightfully deserve.

For investment trusts to reclaim their narrative, it’s time for them to step up their communications strategy. Embracing a dynamic, multi-channel communications strategy that speaks directly to the target audience, will provide them with the clarity and insight they crave.

From the amateur investors to the seasoned financial pros, everyone has had enough of the mumbo jumbo. The era of tangled financial language jargon has passed. It’s time to bid farewell to the antiquated language that has clouded investment trusts’ stories for far too long.

Clear, concise, and compelling communications is the new currency of a successful brand.

Investment trusts might occupy a distinct corner of the investment universe, but as the financial symphony continues to evolve, it’s time for them to take centre stage and embrace their unique melody.