Invest wisely: Intense competition from alternative products is likely to limit demand

Investment trusts are closed-ended funds that raise funds by issuing a set number of shares when they are launched. Funds raised are then invested in a range of stocks and shares in order to generate investment returns and income. Industry firms are involved in managing and administering investment trusts and receive a fee for their services. Therefore, industry revenue is equivalent to the fees earned. Fees are calculated as a percentage of the value of assets under management (AUM).The industry has expanded during the past five years. Financial markets improved overall, despite registering year-on-year volatility, which contributed to growth. Venture capital trusts (VCTs) also grew in popularity and boosted funds flows into the industry, which propelled AUM and revenue...read more.

Industry Statistics & Market Size
Revenue
£1.2bn
Annual Growth 15-20
8.2%
Forecast Growth 20-25
Profit
Employment
5,255
Businesses
319

Industry Threats & Opportunities

  • The weakness of the pound following the EU referendum has boosted revenue growth
  • The popularity of VCTshas increased, although this was constrained by changes to tax relief
  • Growth in institutional funds and reduced pension lifetime allowances islikely to boost fund flows
  • Industry Report - Industry Key Buyers Chapter

    The largest four investment trusts are estimated to have a market share of 16.1% in terms of total AUM in 2019-20. This indicates that the industry has a low level of market share concentration. However, concentration levels vary depending on the type of investment trust and its particular investment focus. Market share is determined as a share of AUM, as opposed to a percentage of revenue, because industry revenue only reflects fees earned for managing and administrating investment trusts, while revenue of individual investment trusts is primarily comprised of income earned from investing in shares. According to the Association of Investment Companies, the top 10 investment trusts are expected to account for just under 30% of total AUM. Mar...purchase to read more.

    Additional Insights for the Investment Trusts Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Investment Trusts Industry are

  • Highly trained workforce
  • Having a clear market position
  • Having an effective distribution/collection network
  • IBISWorld analysts also discuss how external factors such as FTSE 100 and Demand from pension funding in the Investment Trusts industry impact industry performance..

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    What's in this report

    What is the Investment Trusts Industry?

    Operators in this industry administer UK-domiciled investment trusts. Revenue is defined as the fees charged to investors for this service. Investment trusts are closed-ended funds and are public limited companies, as their shares are traded on stock exchanges. Property investment trusts and listed hedge funds are excluded from the industry.

    Industry Products
  • Venture capital trusts
  • Conventional investment trusts
  • Split-capital trusts
  • Industry Activities
  • Administering investment trusts
  • Managing investment trusts
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • FTSE 100
  • Demand from pension funding
  • Household savings ratio
  • Official bank rate

  • Current Performance
  • Investment returns
  • Fund flows
  • Growth limitations
  • Margins improve
  • Chart: Revenue Growth

  • Industry Outlook
  • Market trends
  • Fund flows improve
  • Potential turbulence
  • Table: Investment Trusts Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Investment Trusts Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Life Insurance
  • Pension Funding
  • Consumers

  • Key Selling Industries
  • Investment Banking & Securities Brokerage
  • Stock & Commodity Exchanges

  • Products & Services
  • Conventional investment trusts
  • Venture capital trusts
  • Split-capital trusts
  • Chart: Investment Trusts Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Retail investors
  • Institutional investors
  • Other businesses
  • Chart: Major Market Segmentation for the Investment Trusts Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    WagesPurchasesProfitDepreciationMarketingRentUtilitiesOther
  • Chart: Cost Structure Benchmarking – Sector vs Investment Trusts

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Investment Trusts Industry

  • Industry Globalization
    Scottish Mortgage Investment Trust plc,
  • Table: Scottish Mortgage Investment Trust plc - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Investment Trusts Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Investment Trusts Industry
    Includes:
  • Industry Revenue (2011-2025)
  • Industry Gross Product (2011-2025)
  • Establishments (2011-2025)
  • Businesses (2011-2025)
  • Employment (2011-2025)
  • Wages (2011-2025)
  • Total Assets (2011-2025)
  • Wages (2011-2025)
  • Purchases (2011-2025)
  • Profit (2011-2025)
  • Depreciation (2011-2025)
  • Marketing (2011-2025)
  • Rent (2011-2025)
  • Utilities (2011-2025)
  • Other (2011-2025)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Assets Under Management (Aum)
  • A financial term denoting the value of all funds in an investment trust.
  • Gearing
  • A measure of a trust's financial leverage, which shows the extent to which it is funded by lenders.
  • Open-Ended Investment Company (Oeic)
  • An open-ended collective investment formed as a corporation. It is very similar to a unit trust.
  • Split-Capital Trust
  • A trust that issues a number of share classes to satisfy the needs of different investors.
  • Unit Trust
  • An open-ended fund that does not list its shares on a stock market.
  • Venture Capital Trust (Vct)
  • A trust that predominantly invests in unlisted private companies.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Investment Trusts market research report is a comprehensive guide to market size and growth prospects. Our industry reports offer strategic industry analysis of the factors influencing companies, including new product developments, economic, lifestyle and demographic influences, distribution and supply chain factors and pricing issues. Full analysis accompanies our data forecasts to illustrate how the market responds to emerging industry trends.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
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    This report on Investment Trusts:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Investment Trusts market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Investment Trusts, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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