Investment Trusts Sipps - Sipps Pension Guide

Investment Trust Sipps

Investing in Investment Trusts through your own personal pension scheme with a SIPPS Pension is possible. Investment Trusts are basically companies that use your SIPP Pension money to invest in shares that belong to other companies. Investment Trusts are Public Limited Companies that are listed on the stock exchange and you can buy and sell their shares the same as you can with any other publicly quoted company.

You can see the value of your shares in an Investment Trust by checking the financial pages of the newspapers or of course online. Investment Trusts have the same obligations as any other Public Company and there are extremely strict rules about the accounts they must keep and the way they hold the Annual General meetings.

One of the riskier elements of Investment Trusts is that their own shares are subject to changes in price and are therefore generally a more volatile investment than say a Unit Trust. If you are using your Sipp Pension to purchase an Investment Trust then you have two ways of making your investment grow: One through the value of the share price of the investment Trusts and secondly through the annual dividends which are paid out to its investors.

Of course there is no guarentee that the share price will move upwards but the share price of your Investment Trust should reflect the overall performance of the trust investments. One riskier version of an Investment Trust and one that has suffered badly in recent years is called a split capital trust. These Investment trusts have a limited life span and at the wind up date they sell all their assets and distribute the proceeds between the shareholders.

 The obvious problem with this kind of investment vehicle is that the assets have to be sold no matter what the market is doing at the time and this can lead to selling shares at a time when they should have been held.

If you are considering using an Investment Trust as part of your Sipp Pension then please make sure that you research the investment trust company thoroughly and do take specialist advice before committing any money.