The accessibility of Britannic Asset Management's UK Income Trust was questioned after one IFA ...
The accessibility of Britannic Asset Management's UK Income Trust was questioned after one IFA was unable to receive an application only a matter of days after they became available. It seems though, that Britannic has nothing to answer for. The scenario came about purely because of the huge demand for the product, which Britannic heralds as unique.
Such was the demand that £75m of guaranteed income shares sold out within four days of the offer being bought to the market. Two thirds of this was sold through a limited number of large brokers including Hargreaves Lansdown, Chase de Vere and Chelsea with the rest offered to smaller IFAs on a first come, first served basis.
Francis Ghiloni, sales and marketing director at Britannic, explained: "It's been very successful. The types of IFAs who've got clients in include large IFAs, national IFAs, small local IFA's, IFAs we've never had business from in the past and IFA's we've had long standing relationships with. It's been good for us, IFAs and their clients."
Ghiloni added: "We had a rigorous progress about who we made the product available to. We couldn't estimate how much demand would outstrip supply but we knew the product would sell at least double the amount we had available, potentially five times but we couldn't make any more available."
The part of the trust the IFA in question wouldn't have been able to get his client into would have been the £75m of guaranteed shares that were sold through IFAs explained Ghiloni.
The shares pay out quarterly and have a 100% capital guarantee provided by Britannic as it is confident the assets in the trust will be sufficient to cover the liabilities The guaranteed income shares will have a guaranteed fixed dividend of 7p per year, issued at 100p and redeemed at 100p after five years. The split capital trust itself will have 50% in FTSE 350 stocks, 20% in fixed interest and 30% in other splits.
The trust is expected to total around £400m when it closes. Of that £400m, £75m is guaranteed income shares, £150m is ordinary shares, £45m is zero dividend shares and there's a £130m bank facility.
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