Schroders is launching a split capital investment trust open to new investors as well as being a rol...
Schroders is launching a split capital investment trust open to new investors as well as being a rollover vehicle for the Schroder Split Fund, which winds up in January next year.
The Schroder Split Investment fund will seek to offer investors a high level of income, together with the prospect of long-term growth of income and capital.
The split capital investment trust, as first reported in Investment Week last month, will be run by Ian McVeigh, and will invest 75% of its portfolio in FTSE 350 companies, and 25% in fixed interest securities through the Schroder Monthly High Income and the Schroder Corporate Bond unit trusts, managed by Robert Gall.
The new split will have an initial planned life to 30 November 2007. Its capital structure will comprise of zero dividend shares (34%), ordinary shares (51%) and limited bank debt, which will be limited to 15% of the initial total assets.
Based on current market conditions, the zeros are expected to have a gross redemption yield of 7.75% a year and the ordinary shares will have an initial dividend yield of 6%. Over one year to 2 November 2001, on a mid-to-mid basis, the capital shares of the Schroder Split have returned -13.42% compared with the sector average -40.56%, and over three years they have returned 38.71% against the average capital share return of 14.7%.
Robin Stoakley, managing director of Schroders UK retail, said: 'The existing Schroder Split Fund has delivered strong returns to shareholders in each of the share classes due to the manager's policy of investing in high quality, liquid shares with solid yields. The new investment trust will apply these principles again.'
An EGM will take place on 18 January 2002 for shareholders to decide if they want to rollover into this trust, elect to receive their cash entitlement or to reinvest in a choice of Schroder unit trusts.
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