Investment trusts are public companies that are listed on a stock exchange: TR Property Investment Trust is listed on the London Stock Exchange under the ticker code ‘TRY’.

Investment trusts are one of the oldest types of investment funds. They are available to both professional and non-professional investors. When you buy shares, you become a shareholder in the company.

NAV refers to the value of all the investments the trust holds minus any borrowings. Calculated daily, this is an objective figure and is a good measure of manager performance. The share price will generally relate to NAV, but it is also subject to supply and demand – and the sentiment of other investors.

When an investment trust’s share price is above its NAV, we describe it as trading at a premium. When NAV is higher than the share price, it is trading at a discount. There are potential advantages to both scenarios depending on whether an investor wants to buy or sell, and how long they intend to hold their shares.

REITs are a type of specialist security that TR Property holds within its portfolio. REITs have their own underlying assets and they usually directly own, finance, or operate commercial properties.

TR Property investors will have exposure to REITs, other property securities, as well as physical assets owned directly by the trust. The rules governing REITs and investment trusts are also slightly different.

Investment trusts have the ability to borrow money in an attempt to enhance returns. This is called gearing, or sometimes, ‘leverage’. This act magnifies both positive returns as well as losses.

Depending on market conditions, TR Property may employ gearing from time-to-time, up to a maximum of 25 percent of the portfolio value. Gearing can reduce returns in some market conditions.

Two of the most widely-used tax wrappers are Individual Savings Accounts (ISAs) and Self-Invested Personal Pensions (SIPPs).

These wrappers are government schemes which allow investors who comply to avoid tax on part or all of their investment returns. There are annual limits on the amount that can be invested (currently £20,000 annually for an ISA).

Most investment trusts – including TR Property – can be held within these wrappers.

All investment trusts, their managers, and board members are regulated by the Financial Conduct Authority (FCA).

UK investment trusts – of which TR Property is an example – are also listed on the London Stock Exchange and so are subject to listing rules established under the Financial Services and Markets Act 2000. They are also subject to the Companies Act.