Investment trusts are more risky in terms of their volatility than unit trusts, according to Premier...
Investment trusts are more risky in terms of their volatility than unit trusts, according to Premier Fund Managers.
The group has published a series of risk tables which grade all the major investment categories from one to 10 in terms of annual volatility over the past 10 years, with one being the least risky. The average investment trust appears in risk category seven while the average unit trust appears in risk category four.
Jonathan Fry, managing director of Premier Fund Managers, said: "As one would expect, at one end of the scale you have cash, gilts and bonds, all relatively low risk investments, compared to the other extreme.
"Here are the Japanese, Far East and emerging market unit trusts and investment trusts, among the riskiest types of investments around, the riskiest of all being warrant investment trusts.
"The average investment trust is significantly more risky than the average unit trust, primarily due to rising discounts to NAV and higher gearing."
"Investors need to decide how to look at risk and how much risk they are prepared to take.
"Nobody wants to lose money but investors need to know how likely it is that they will realise satisfactory returns rather than incurring losses they cannot afford."
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From 1 March