Gartmores new absolute growth & income trust is a split capital investment trust aimed at investors who are looking for long-term growth and high income.
The trust will invest in a combination of two portfolios. Sixty per cent will be a growth portfolio, which will invest in UK growth companies with small to medium capitalisations and which trade on the London stock exchange, AIM, the Irish stock exchange and EASDAQ.
The remaining 40 per cent of the investment trust will invest in zero dividend preference shares in investment trusts, to provide a yield of 9.7 per cent.
The yield of 9.7 per cent for the income portfolio is high and therefore the product has a high degree of risk. However this is balanced by the fact that UK is still seeing good economic growth.
According to Standard & Poors the Gartmore second Scottish national trust investment trust is ranked 34 out of 34 funds, based on £1,000 invested on a mid-to-mid basis with net income reinvested over one year to October 30, 2000.