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UK Investment Trust Study – UKITS

UKITS is a bi-annual research study aimed at giving investment trust providers and their boards insight into how the market is developing, the impact of marketing and communication efforts, peer group analysis and potential opportunities to grow the investor base.

Specifically, the research helps UK-based asset managers and investment trust boards to understand the changing attitudes to investment trusts, brand resonance, product awareness, sales and media coverage.
There is a sense that investment trusts do not receive as much attention that they should by investors and industry players. This study aims to help providers and boards better understand and, therefore, address this issue.

Two audiences are the primary focus of the research:

• DFMs/wealth managers;
• Private investors (mostly self-directed).

It would be possible to add a third audience, investment advisers, to the study if the consensus was that it would be valuable to research their investment trust buying habits as well. The advisory market was not included in Wave 1 as it was not perceived to be a key target for investment trust providers.

2. Methodology

Quantitative and qualitative research is first conducted among DFMs/wealth managers, with private investor research following six months later.

2.1 Online quantitative research with DFMs/wealth managers

This stage of the research aims to outline the profile of investment trust-holding DFMs/wealth managers and non-holders, measure growth potential and map the customer journey of this segment. We will also explore barriers to purchasing.

• Current IT investors x150 completes

2.2 Qualitative phone interviews with DFMs/Wealth Managers and other influencers in distribution

Research in Finance will conduct 20 interviews with a selection of DFMs/wealth managers, brokers, research/ratings agencies and trade journalists. This will provide deeper insight into DFMs’ attitudes around investment trusts, and help investment trust providers to engage more effectively with them and the companies feeding them information.

2.3 RiF Tracker insights
Research in Finance tracks print trade advertising and editorial sentiment for the top 50 asset management companies in the UK. Launched in May 2013, the RiF Tracker sheds light on the funds and asset managers getting the most exposure, and how this has shifted over time. Ads and editorial mentions for investment trusts can be analysed separately to funds overall.
Examples of “generalist” titles included would be Financial Adviser, Money Marketing and New Model Adviser; “discretionary” titles include Investment Week, Portfolio Adviser and Wealth Manager.

2.4 Online quantitative research with private investors

This stage of the research aims to explore how self-directed private investors view investment trusts, the extent to which they understand them and use them, how they use them and how they research and choose investment trusts. We also assess brand awareness and advertising recall with this audience.
• Current IT investors x150 completes

2.5 Qualitative phone interviews with private investors and other influencers in distribution

Research in Finance will conduct 20 interviews with a selection of private investors, decision makers at the D2C platforms and consumer journalists for titles such as Investors Chronicle and the Telegraph. These interviews should illuminate on the degree to which the consumer platforms and publications are open to supporting the investment trust industry, and what could encourage them to do so further.

3. Sample Sourcing

The data samples will principally be drawn from Research in Finance’s proprietary databases of intermediaries and private investors. There is also the option to supplement these databases with contacts from panel providers where desirable.

4. Topic coverage

Research in Finance worked in collaboration with the Wave 1 & 2 subscribing groups to formulate questionnaires and discussion guides that would cover the areas of most interest and value. As an ongoing study, many questions asked in Wave 1 & 2 will also be asked in Wave 3. However, there is room for the research to evolve and incorporate new topic areas pertinent to the groups.

4.1 Tracking topics

Wave 3 of UKITS will continue to cover, and track over time:

• The profile of professional and private investment trust investors;
• Current use of investment trusts vs. other investment vehicles and direction of travel;
• Perceived benefits of investment trusts vs. other investment vehicles;
• The relative importance of various selection criteria when choosing investment trusts;
• Information sources used to research investment trusts, as well as usefulness of specific sources such as the Report and Accounts;

• The role of brokers;
• Event attendance and preferences;
• Perceived market leaders (individual investment trusts and firms);
• Usage of and satisfaction with subscribing asset management firms;
• Key barriers among non-users;
• Encouraging investment trust take-up;
• Advertising and editorial coverage in the print trade publications.

4.2 Other suggested topics

Research in Finance suggests the following possible new topic areas for Wave 3:

• The role of platforms in promoting and limiting investment trust use, including where investment trusts feature in their development plans;
• How financial journalists cover investment trusts and what could encourage greater coverage;
• Specific focus on use of investment trust research provided by brokers and fund research companies;
• Perception of the AIC and the usefulness of its website;
• DFM/wealth managers’ views on investment trust sales best practice;
• The impact of fractional trading on investment trust use within centralised investment propositions.

5. Deliverables

Research in Finance will provide insights in the following formats:

• PowerPoint presentation to be delivered to each subscriber individually;
• Four-page executive summary of findings for each stage of the research, to alert investment trust boards to the key findings and their implications;
• Tables and charts in Excel if required.

The focus will be on providing pragmatic insights that are easy to digest, communicate internally and act upon.

6. Timings and cost

Research in Finance is looking to launch Wave 4 of the DFM/Wealth Manager stage of the research in April 2019.

The cost of subscribing to Wave 2 is £12,500 – £15,000 +VAT, depending on the number of investment trust providers participating in the study.

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