Premier Portfolio Managers is targeting an initial yield of 8% on its Zero Preference fund. Launc...
Premier Portfolio Managers is targeting an initial yield of 8% on its Zero Preference fund.
Launched last week, the Oeic will buy into zero dividend preference shares of investment trusts and other closed-end funds.
The portfolio, to be managed by David Hambidge and Raj Hallan, will look to have 20-25 holdings.
The fund will be available through both an Isa and a Pep but Premier believes it also has an attractive tax angle for those investing outside these two wrappers.
Gains from zeros count towards the annual CGT allowance, now at £7,500, and most people in the UK do not make full use of this, according to the company
Jonathan Fry, managing director of Premier, said the launch had partly been in response to demand from intermediaries and partly because the zeros market is looking so attractive.
He added: 'In technical terms, if you look at the average zero over the last 10 years, it is less volatile than the long gilt. On a zero you would be getting a return 50%-60% more than gilts, so zeros are offering better returns and less volatility than gilts at the moment.'
The fund will have an initial charge of 5% and an annual management fee of 1.25%. There is 3% initial commission and 0.5% renewal.
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