Mike Sandifer, investment committee member on the Amerindo Internet Fund investment trust, says the ...
Mike Sandifer, investment committee member on the Amerindo Internet Fund investment trust, says the issues affecting split capital investment trusts are not directly related to other trusts such as his, but the general feelings the issues generate among investors could result in fallout for the entire investment trust industry.
Amerindo, which is concerned with its own problem of having a share price trading at a steep discount to its net asset value, currently has no gearing, and does not hold shares in split cap investment trusts.
Nevertheless, Sandifer says, the split cap story "smacks of risk" for investors, which could affect their attitude towards other sorts of trusts such as Amerindo.
It is invested in specific technology areas that may also come to be perceived as risky due to the poor equity returns experienced over the past couple of years, even though there is no direct link between Amerindo and any split cap trusts.
If investors start to look for "prudent" investments, then a highly technology focused investment trust may be the "first thing you don't think of" because of new investor prejudices
Sandifer admits that the market has been tough for the quoted elements of Amerindo's portfolio, but says that there is evidence of recovery in areas such as enterprise software and ecommerce that is expected to lead to a better initial public offering market in 2003, releasing significant additional value from the trusts existing unquoted technology holdings.
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