Threadneedle to launch second investment trust

Threadneedle is planning the listing of its second investment trust, the Threadneedle Asset Backed Income trust, next month.

The trust’s portfolio will consist of asset-backed securities (ABS) and will be managed by Henry Cooke, a specialist ABS manager. Mr Cooke will target a yield of 6 per cent and a total return of 7-10 per cent a year.

Mr Cooke said: “Since the financial crisis a number of areas of fixed income have rallied providing investors with some good returns. However, ABS are only now in the process of repricing in line with fixed income markets.”

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The launch comes after Threadneedle won the mandate of the £37.2m UK Select trust earlier this year.

The new trust will be domiciled in Guernsey and listed on the London Stock Exchange. Threadneedle is seeking to raise £200m-£250m during its offer period in October, and investors will be offered the option of full redemption after three years.

The trust’s annual management charge will be 0.75 per cent.