Framlington this week finalises the structure of its split capital investment trust due for launch a...
Framlington this week finalises the structure of its split capital investment trust due for launch at the end of February.
The Framlington Split Income Trust will invest 80% of its underlying portfolio in the income shares of other split cap trusts. The remainder will be put into the shares of conventional investment trusts.
Paul Branigan, head of closed-end funds at Framlington, will run the trust. He will be able to buy capital shares within the growth portfolio if he is feeling bullish on world markets, or zero dividend preference shares if he wants to take a more defensive stance.
The underlying portfolio for both the income and growth elements of the trust will be broadly spread across all sectors from global generalists to European, Asia, UK and specialist trusts.
Framlington intends to offer investors a class of zero dividend preference shares as well as geared ordinaries. The overall yield on the portfolio is going to be about 10%.
Among those who will be on the board of the trust are Neil Birrell, head of specialist funds at Framlington, and Mike O'Shea, joint managing director of Premier Asset Management.
Launch costs on the trust are being capped at 2.25% and Framlington will take a monthly fee of seven basis points on the value of the underlying portfolio.
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