Your IndustryJul 10 2014

Guide to Split Capital Investment Trusts

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CPD
Approx.50min

    Guide to Split Capital Investment Trusts

      pfs-logo
      cisi-logo
      CPD
      Approx.50min
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      Introduction

      By FTAdviser
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      The investigation followed the heavy losses suffered by many private investors and clients of split capital investment trusts in the early part of the last decade.

      The role of four individuals’ was highlighted and they agreed not to work within the financial services’ industry for fixed time periods.

      The FSA had initially investigated 22 companies but reduced its efforts in 2004 when 18 of them offered an ex-gratia, no blame payment of nearly £200m to investors who had lost money on zero dividend preference shares (ZDPs).

      Many at the time felt the outcome of the investigation was inadequate and offered clients and private investors too little protection or compensation.

      So are split capital investment trusts to be avoided at all costs or have these vehicles got a part to play in investor’s portfolios?

      This guide looks at how split capital investment trusts work, the pros and cons of the vehicle and the regulatory stance in 2014.

      Material for this guide has been contributed by Annabel Brodie-Smith, communications director of the Association of Investment Companies and Russ Mould, investment research director of AJ Bell.