How to choose a Trust

There are hundreds of investment trusts to choose from, but you can narrow the choices by being clear about why and how you're investing. These four questions should help:

• What do you want from your investment? - Do you want a regular income or are you putting money away for a number of years so it can grow, or do you need a combination of income and capital growth?

• Will you invest a lump sum or make regular payments? - If you have a lump sum, you can invest directly (or via a wrapper product such as an ISA or savings scheme) in an investment trust. If you want to make small regular payments, you probably need to invest in a wrapper product. One of the advantages of regular saving is known as 'pound-cost averaging': you avoid the risk of buying all the shares in one go when the price is high.

• How much risk do you want to take? - Roughly speaking, the level of risk you might be prepared to accept depends on how long you can tie up the money. But only accept a level of risk you understand and feel comfortable with.

• Do you want to invest in a particular sector? - Investment trusts are grouped into different sectors investment objectives will vary and no two trusts are the same. Different regions of the world and economic sectors will have varying levels of risk.