Industry Analysis & Industry Trends
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 participants are involved in managing and administering investment trusts in order to provide superior returns 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 trended upwards during the past five years. Financial markets improved, despite enduring some volatility, supported by quantitative easing activity and loose monetary policy, which contributed to growth... purchase to read more
Industry Report - Industry SWOT Analysis Chapter
The industry is in the growth state of its life cycle. As such, industry value added, which measures the industry's contribution to the economy, is expected to grow at a compound annual rate of 6.9% over the 10 years through 2021-22. Meanwhile, the overall economy is forecast to grow at a compound annual rate of 2.3% over same period. This indicates that the industry will account for a growing share of the overall economy.
Although investment trusts have been in existence for over 140 years, the investment trust market is still around a sixth of the size of the unit trust/OEIC market in terms of numbers and a fifth of the size in terms of AUM. This suggests that the industry has significant growth potential.
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