manager with a consistent track record of making money for investors is usually a good sign. Again the annual report should give you lots of information on this. You can also find information about managers' track records on specialised websites such as trustnet.com or morningstar.co.uk . It's worth checking if the manager and directors of the investment trust have a significant stake in the trust. After all, if they are not prepared to risk a meaningful amount of their own money in the trust they are running, why should you? We'd look for shareholdings at least equivalent to their annual salaries. Premiums and discounts As mentioned above, because investment trusts trade on the stock exchange, they don't always reflect the underlying value of their assets. There are lots of reasons why this happens. Trusts can trade at a premium to NAV because investors are very optimistic about the future. This can mean that the trust's shares go up faster than the value of the investments that it holds. A high-profile fund manager can also sometimes command a premium. It's also possible that the trust's assets could be undervalued. This can happen if it is invested in things like property or unlisted investments where the investments change hands less regularly than listed shares, and so are less easy to value. Buying a trust for more than its assets is usually not a good idea. Premiums can quickly become discounts and you can end up losing money. Discounts happen for the opposite