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AITC says the worst is over for split sector

The collapse of the Aberdeen preferred income trust and the Dartmoor investment trust have brought the total number of split-capital trusts in receivership to six but the Association of Investment Trust Companies says the troubled sector is turning the corner.

To date, a further 12 split-cap trusts have had trading in their shares suspended, with investors standing little chance of recovering any of their original investment.

The AITC believes the worst is over but advisers are warning that talk of buying opportunities should be treated with caution.

AITC communications director Annabel Brodie-Smith says: “There may well be a few more split caps that may be pushed into suspension, but we are closer to the end than the beginning. We are not going to get another 18 suspensions. This is all clearly very distressing for the investor, but analysts are beginning to point out that there are buying opportunities out there.”

Torquil Clark investment strategist Philippa Gee says: “I have problems with the talk of buying opportunities in the split-cap sector. We think there is still bad news waiting to come out and the poor state of the markets is not helping it.

“For people still stuck in trusts, we say get as much information on the trust as you possibly can before deciding what to do because it is a terrible time to come out and they are not all bad.”

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