Investment trusts missing great chance, says report

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The Independent Online
THE investment trust industry must respond to the changing financial needs of the 'Thatcher generation' if it wants to capture a larger share of the personal savings market, according to the latest yearly review of the sector by NatWest Securities.

The NatWest Securities report published today says the decline of the Welfare State has given the middle classes a vast and growing need for savings to pay for homes, children's schooling and pensions.

Trust analyst Robin Angus says: 'The investment trust industry is at present faced with the greatest opportunity it has had in my lifetime - perhaps even in this century. And so far it hasn't just failed to grasp it, it appears to have failed to see it.'

Mr Angus says investment trust companies must be seen to offer investment products tailored to meet financial needs.

Although investment trusts have attracted thousands of new investors in recent years due to the popularity of savings schemes, the report says the industry's achievements are modest compared with unit trusts. Last year, the amount invested in savings schemes more than doubled to pounds 240m - but unit trusts attracted pounds 9.1bn.

Mr Angus warns investment trust companies against making too much of their recent outperformance. The recent exceptional performance will not be repeated because much of it has come from the narrowing of discounts, the report says.

'It is a one-off. It will not happen again, because it cannot happen again,' Mr Angus said.