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Gartmore and Aberdeen offer on split-cap trusts

Gartmore and Aberdeen Asset Management are both laun-ching split-capital invest-ment trusts.

Aberdeen&#39s European growth and income trust, which is open until the end of the month, is being launched as a rollover vehicle for investors in Jupiter&#39s European split-cap fund, which is due to wind up next month.

About 65 per cent of the fund will be invested in continental European equities, 20 per cent in an income portfolio and 15 per cent in a bond portfolio. It will hold three categories of shares – income, capital and zero-dividend pref- erence shares.

The income shares will aim to pay a quarterly income of 10.5 per cent a year while the zeros aim to offer 9 per cent annual growth. The fund has a planned life of six years.

Aberdeen European fund manager Adrian Fowler believes European prospects are very healthy. He says: “Deregulation, privatisation and corporate restructuring are all occurring against a background of an increasing focus on shareholder value. Demand from institutional and retail investors increasingly concerned about retirement provision also makes the long- term outlook attractive.”

The fund will be managed by a number of managers from Aberdeen&#39s technology, European and specialist funds teams. The Gartmore Absolute growth and income trust, which is opening next month, will be Gartmore&#39s seventh split-cap trust.

It will consist of ordinary income shares and zero-dividend preference shares, anda seven-year bank loan.

Sixty per cent of the fund will be invested predominantly in UK growth companies with a market cap of up to £1bn. This part of the trust will be managed by Gervais Williams.

The remaining 40 per cent of the fund will be managed by Richard Prvulovich and will invest in other split-caps trusts and high-yielding investment trusts.

Prvulovich says: “We believe the high yield of ordinary income shares as well as the excellent capital growth prospects on the zero-dividend preference shares will prove to be very attractive to retail investors.”

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