Extra Costs To Consider When Investing In The Best Investment Trusts

Want something to directly invest in that is low cost? Cheaper than other forms of investment, investment trusts are quickly becoming popular. Before you invest in what are considered to be the best investment trusts out there, you should consider a few things. The value of the shares that you invest in can fluctuate more than those in unit trusts, and there are always additional costs to think about.

As with any type of investment, there are several charges that could be applied by an investment trust.

The initial charges are those which are applied at the beginning of the investment. Normally the investment charge is 5% of your investment amount, but this is not applied by all investment trusts.

All investment funds have annual charges applied. These cover administration and management costs of your individual investment. The amount varies between different investment trusts but the average annual charge is 1.75%.

If you withdraw any money from your investment fund, you could be charged (especially if you do it fairly soon after you have created the investment). Find out what the cost of performing this action is before you invest.

You also need to think about the costs of switching your investment in the future. Some companies do not allow switching from one company to another, so in order to switch successfully you would need to go through the process of selling and then repurchasing your investment and be subjected to transaction costs as well as a variety of other charges. Be aware of what the future costs of switching may be, when investing your money in investment trusts.

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