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Investec trust aims for zero rollovers

Investec is to target money from closing zero-dividend preference trusts with the launch of its capital accumulator trust to be run by Alastair Mundy.

The trust is a closed-ended version of Mundy’s 120m open-ended capital accumulator fund and has been made the designated roll over vehicle for Gartmore’s SNT Zeros trust which currently contains 95m.

A further 700m sits in zeros looking for a home over the next decade and Investec managing director David Aird says he is targeting other trusts to secure their roll over re- commendations.

Traditional zero-dividend trusts suffered negative publicity owing to high gearing in the split-cap crisis and are suffering low demand with few new launches.

The Investec trust is not geared and uses derivatives to reduce risk while giving exposure to the upside of the underlying equities chosen by Mundy. It targets a 7 per cent a year capital return without paying out income and will have a life of 10 years to a continuation vote and a 0.75 per cent annual management charge.

Chelsea Financial Services managing director Darius McDermott says: “Investec has been very clever in spotting a gap in the zero market and producing a product to fill it. Investors will benefit from upside in the stocks and protection from the downside.”

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