Investors are often told that they shouldn’t put all their eggs in one basket. However, there is an alternative option: put all the eggs in the same basket but pick the eggs with care and guard that basket really, really closely.
The investment trust structure allows fund managers to take punchier positions in their portfolios. Open-ended funds do not allow their managers to hold more than 10% of the trust’s assets in any one company. There are also rules on how much of an individual company they can own. Investment trusts aren’t subject to the same restrictions.