Before Investing

Things to Consider….

The Trust is a UK-based investment trust traded on the London Stock Exchange.

All listed companies are identified by a “ticker” short code. For example, Allianz Technology Trust is ATT, The Brunner Investment Trust is BUTand The Merchants Trust is MRCH.

You can easily invest in the Trust by purchasing shares through an investment platform operated by a third party provider, a stockbroker or a financial adviser. Many online platforms allow you to deal in shares in ‘real time’ and some offer an option to invest regularly each month as well as lump sum investing. Competition between platform providers is keen so charges are usually very competitive. Nevertheless, it pays to undertake detailed research before investing. You will find helpful information to guide you below.

Platform Investing

Investing Through an Investment Platform

A good and cost-effective way to buy the Trust’s shares can be via an investment trading platform.

These are often known as ‘fund supermarkets’ as they are online shops where you can buy and sell a comprehensive range of investments, including Investment Trusts, Open Ended Investment Companies (OEICs) and Unit Trusts - as well as in the shares of listed companies. So, instead of having multiple accounts with lots of different providers, your platform account can be a ‘one stop shop’ where you can hold all your investments in the one ‘pot’.  See below where you will find links to a range of these platforms.

Many platform providers allow you to buy and hold your shares within an Individual Savings Account (ISA), Junior ISA or Self Invested Personal Pension (SIPP), all of which have potential tax advantages. Or you can simply deal in your chosen shares without the tax advantages but also without any limits on how much you can invest.  Most platforms will allow you to invest lump sums and/or regular savings (i.e. a fixed amount each month). The latter can be very helpful if you want spread your investments throughout the year or if you’re simply uncertain as to whether now is a good time to invest or not.

Costs and Service

Competition amongst platforms has grown markedly over recent years so investing online can be a very cost-effective way to buy the Trust’s shares.

However, it’s really important to consider the overall level of fees as well as the range of services available. Don’t forget that cheapest is not always best - and also that some platforms have flat fees while others levy percentage-based charges. Typically, you will also pay a fee every time you buy and sell shares so you need to bear in mind these costs too if you are trading frequently.

The decision on which platform to use is an important one, so remember to play close attention to the service each offers - as well as the overall tariff of charges, including annual fees, administration and dealing charges. 

The Financial Adviser route or DIY?

You can use a financial adviser to open or look after your platform account, as well as your underlying investment decisions. You will pay a fee for this service, determined by the scope of the service being offered. If you do not currently have a financial adviser, details of authorised financial advisers in your area can be found at www.unbiased.co.uk

Investing for Children

A financial head start for children

Giving children a financial helping hand can assist with school and university costs, a first home or car - or just provide a decent financial boost to adult life. And it’s never too early to start putting money aside as the more time that your investments have to grow, the more effective your financial help can be.

What sort of investments you choose is up to you but if you are planning to invest for the next 5, 10 or even 20 years, investing in investment trusts could be more rewarding than ‘safe’ investments such as bank or building society deposit accounts, after inflation. Moreover, using investment trusts can be simple, sensible and relatively low cost but you should always remember that past performance is no indicator of future returns.

Investing in investment trusts for children

Although children cannot invest in investment trust shares in their own name, there are a range of options available to parents (or other adults) wishing to invest on their behalf:

The designated account route

Adults can make children’s investments in their own name, simply adding the name of the child to the account (this is called a designated account). There is no maximum investment limit. Following this flexible and straightforward route, you retain ownership of the shares, allowing you to access the money at any stage but with the option to transfer the assets to the child when they reach the age of 18 (or at a later stage, if you prefer). If you choose this route, your designated investment will be taxed as your own and will remain within your estate for inheritance tax purposes.

Junior ISA

A Junior Individual Savings Account (JISA) works in the same way as a standard Individual Savings Account. This means that there’s no income tax to pay and no capital gains tax liability to worry about. Once a parent or guardian has opened a JISA, anyone can contribute to it making it very easy for other family members to invest.   There is a maximum investment limit each tax year (up to £4,368 for the 2019/20 tax year) and no withdrawals can be made until the child reaches 18 (at which point the JISA converts into the child’s name). 

Junior SIPP

Planning ahead for a child’s retirement may seem rather extreme but it can be a very worthwhile, tax-efficient route. You can start putting money into a Self-Invested Personal Pension (SIPP)  now and invest for the truly long-term, since although control passes to the child when they reach the age of 18 there’s no access to funds until the child reaches retirement age. Anyone can invest and you will receive basic rate tax relief from the government on contributions. There is a maximum annual contribution limit (£3,600 gross or £2,880 net for the 2019/20 tax year). 

How to invest for children

Allianz Global Investors does not offer its own Investment trust savings plans for children. However, a number of the providers listed within our Platform Directory do and their products enable you to invest in Allianz Technology Trust, Brunner and Merchants on behalf of children. Please contact your chosen provider to find out what each offers.

Please remember that the value of tax relief depends on individual circumstances. If you have any doubts about the tax implications of investing for children you should seek professional advice.

Opening Your Online Account

If you are happy to make your own investment decisions, as many investors are these days, you can open your own account online by following the instructions provided by your chosen platform. This should be a simple and straightforward process.

If choosing this route, you may also be intending to make your own investment decisions, in which case the quality of investment research available on your chosen platform may also be an important factor to consider. 

Research, research, research

Before your make your final decision on your chosen platform, remember to do your homework and bear the following points in mind:

  • Do you need advice or are you happy to make your own investment decisions (DIY)?
  • General investment plan or an ISA or SIPP?
  • Lump sum investing, regular savings or both?
  • How much are you likely to invest (as the level of charges will vary)?
Research, research, research

Platform Directory

Alternatively, information on how to find a stockbroker can be found at www.pimfa.co.uk. Note: If you click on these website links you will be entering new websites. We are not responsible for the content and information once you have left the Allianz Global Investors site. Please note Allianz Global Investors does not make recommendations on where to buy investment trusts and is unable to provide financial advice. You are strongly advised that if you are unsure about the most suitable option for your needs that you should contact a financial adviser.

© Allianz Global Investors GmbH 2019, Registered Office: Frankfurt am Main, Register: HRB 9340, Local court: Frankfurt am Main. All Rights Reserved. The Merchants Trust PLC is incorporated in England and Wales. (Company registration no. 28276). Registered Office: 199 Bishopsgate, London, EC2M 3TY. The Company is a member of the Association of Investment Companies - Category: UK Equity Income.