By James Thorneley The AITC is planning to abolish the International General and International Capit...
By James Thorneley
The AITC is planning to abolish the International General and International Capital Growth sectors.
Their elimination is among a number of proposals the trade body is putting to members regarding the reorganisation of investment trust statistic categories.
The majority of trusts in the two sectors will be placed in one of two new sectors. Global Growth will consist of trusts which have less than 80% of their assets in any one geographical area with at least 20% in UK registered companies.
Overseas Growth will be for generalists with at least 80% of their assets overseas. For instance Foreign & Colonial investment trust will be in the Global Growth sector while Edinburgh Worldwide will be listed in Overseas Growth.
Ruth Bromnick, statistics manager at AITC, said: "The sectors are reviewed every six years and we felt we wanted to make them as consumer friendly as possible allowing investors to compare like for like and also against unit trusts."
Along side the Global Growth and Overseas Growth sectors, the trade body is proposing to establish Global Growth and Income and Overseas Growth and Income sectors. These are for trusts which yield 1.5 times the FTSE World ex UK index. As reported in Investment Week in March the technology and biotech trusts currently in International Capital Growth sectors are to be given their own specialist sectors.
Also proposed is the merger of the UK Capital Growth sector with UK General, to be renamed the UK Growth. UK Income trusts will be split into two sectors, those which yield 1.5 times the FTSE All-Share, and those which yield two times that of the index.
Smaller company sectors for the US, Japanese and European markets are also planned to be introduced. At the moment sector average is not an accurate comparison for a trust, due to the different market capitalisations trusts within one sector invest in.
It is also proposes to abolish the closed-end funds sector. The trusts currently in the sector will be placed in more appropriate peer groups. For instance the Scottish Value investment trust will be put into the Global Growth sector, but it will be flagged to inform investors its portfolio consists of shares in other investment trusts.
A Latin American sector is planned to be introduced which would include Aberdeen Latin America, F&C Latin America and Templeton Latin America among others, with the current Global Emerging Markets category being retained. In addition a European Emerging Markets sector is to be established.
The ordinary shares of split capital investment trusts will be placed in a peer group which is most appropriate to their underlying investment portfolio. For example the ordinary shares of JZ Equity Partners will also appear in the Venture and Development Capital sector.
The shares will be flagged in the sector showing investors they are one asset class of a split capital trust. The shares will also appear in their split cap categories as well.
The trade body is consulting with members on the proposed change. with a view to implementation in October.
A full list of the proposed category definitions is available from the AITC by calling 020 7282 5580.
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