BFS Investments has packaged the shares of its UK Dual Return Trust into two types of unit aimed at different investors.
Geared ordinary units consisting of income shares and capital shares are most suitable for charities and pension funds and investors who are willing to put their capital at risk in the pursuit of high income.
Growth units consisting of capital shares and zero dividend preference shares are intended for investors who are purely interested in growth over a seven-year period.
The capital shares are geared 230 per cent to the market but the inclusion of zeroes offer some degree of capital protection for investors who might be concerned about the risks associated with geared investments.
BFS hope the UK Dual Return Trust will be used as a vehicle for capital gains tax rollover when the Tor investment trust — managed by Axa Sun Life – is wound up. The BFS UK Dual Return Trust will run for seven years which is believed to be a reasonably long enough period to avoid being caught by weaknesses in the market. Going beyond a seven year period would make the gearing the shares more expensive and this would eat into investors’ capital.
According to Standard and Poor’s the BFS Income and Growth Zero Trust is ranked 21st out of 61 funds based on £1,000 invested on a mid-to-mid basis with net income reinvested over one year to September 26, 2000.
