View more on these topics

Aberdeen rocks split-cap sector

The decision to suspend dividends on Aberdeen&#39s European technology & income trust could send the split-capital investment sector into turmoil.

The trust stopped dividend payments on its income shares last week after assets fell to £178m from £400m at its launch in March last year.

After subtracting the trust&#39s £164m of bank borrowings, the fund now has a value of around £14m.

The fund&#39s main investors, which include BFS&#39s income & growth and geared income trusts as well as several Aberdeen funds, are likely to take a knock in income, which will in turn hit net asset values. The board is considering early winding-up or reconstruction of the trust.

Christows head of investment trusts Nick Greenwood says the split-cap sector may be lucky enough to avoid disaster this time but the market is bound to see an increasing number of incidences like this.

He says: “Last week was not a surprise. The shares were yielding 61 per cent and anything that yields that is probably not going to be able to make the dividend payment.”

Aberdeen says the fund is mainly institutional and may not affect retail investors.

Recommended

The drag trade

Last week, I looked at continuing improvements in life expectancy, the implications of which form what I perceive may be the severest risk with income drawdown recommendations – the probability that annuity rates will continue to fall over the next couple of decades, even if interest rates remain static. I strongly believe that drawdown and […]

Two new B&W products from Exclusive Connections

Mortgage packaging network Exclusive Connections is rolling out two new loans funded by Bristol & West. EC is offering a buy-to-let mortgage at 6.99 per cent until 2004, after which it reverts to 1.75 per cent over Bank of England base rate. The stepped fixed rate loan has a rate of 5.25 per cent until […]

Regulation by risk

The FSA is focusing on a radical new risk-based approach to supervising firms to apply resources to the areas we believe pose the greatest risk to statutory objectives. We will be seeking to identify areas of concern. The risks will relate to the FSA&#39s four statutory objectives of market confidence, consumer protection, public understanding and […]

TMO leaves tracks

The Mortgage Operation has unveiled the freedom mortgage, a flexible base rate tracker that discounts the Bank of England base rate by 0.45 per cent in the first nine months. This gives a current payable rate of 4.55 per cent and after the discount period, it will track at 1.2 per cent above the base […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com