ELI5: Explain Like I'm 5

Investment trust

Okay kiddo, so an investment trust is like a big piggy bank that lots of grown-ups put their money into. The grown-ups who put their money in are called investors, and the investment trust uses all the money it has to buy lots of different things that make money, like a toy store, a bakery and a movie theater.

When the things that the investment trust buys make money, like when lots of people come to the toy store and buy things, the investment trust takes some of that money and gives it back to the grown-ups who put their money in. This is called a dividend.

Now, the cool thing about an investment trust is that it's managed by a group of grown-ups called a board of directors. These grown-ups are like the bosses of the investment trust and they choose what things the piggy bank should buy to make money.

Also, the grown-ups who put their money in the investment trust can buy or sell their shares, which is like a ticket that lets you own a little bit of the piggy bank. And because the investment trust owns lots of different things, like the toy store, the bakery and the movie theater, if one thing doesn't make as much money, the other things might make up for it, so the grown-ups won't lose all their money at once.

That's pretty much it, kiddo. An investment trust is like a big piggy bank that lots of grown-ups put their money in, and it uses the money to buy lots of different things that make money. The grown-ups who put their money in can get some of the money back when the things make money, and the investment trust is managed by a group of grown-ups called a board of directors.