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Investment trusts

Companies formed to invest the collected funds of shareholders. They invest in other companies, the spread of holdings being very wide. Investment trusts help small investors by giving them the benefit of spreading their risks and enjoying the advantages of experienced management. Investment is normally in quoted securities, but these companies will show interest in smaller or unquoted businesses where they are offered good security. They may also underwrite issues of shares or help to form specialist finance companies, perhaps with a view to investment in smaller businesses.

Reference: The Penguin Business Dictionary, 3rd edt.