When the problem is a premium

Article Abstract:

Investors may find a United Kingdom investment trust with stocks at a premium, and this indicates that demand for the stocks is strong. Low interest rates tend to boost demand for yield, and this boosts demand for split capital stocks which may be at a premium. Some split stocks have yields of over 10% while the FTSE All-Share Index has a 2.3% yield. Income trusts are not the only trusts which may trade at a premium, and second hand endowment polies, which offer possible high capital growth, have an average 5% premium.

Portfolio Management

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Poachers and gamekeepers

Article Abstract:

United Kingdom investment trusts have moved away from launches of new trusts and are instead focusing on boosting stockholder value. Investment trust managers have tended not to make bids in case this leads to retaliation when they perform poorly. This is starting to change and there is concern that a new trend of aggression could lead to the encouragement of a shorter-term view in the investment trust industry. Indexing is becoming more popular but there could be problems for tracker funds if a bear market develops.

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A fistful of veterans

Article Abstract:

There are five major general United Kingdom investment trusts which have total assets of more than 8 billion pounds sterling. These trusts were established between 1868 and 1909. They tend to be weighted toward the UK and have annual fees of under 0.5%, with narrow spreads. Investors can buy stocks in these trusts through personal equity plans. The trusts are Witan, Foreign and Colonial, Alliance, Scottish Mortgage and Trust and Scottish Investment Trust.

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