Citywire for Financial Professionals
Stay connected:

View the article online at http://citywire.co.uk/money/article/a598267

SVG to launch equity income trust with 6.5% yield target

SVG Investment Managers is to launch the Strategic Equity Income trust, which will target a 6.5% yield.

 
SVG to launch equity income trust with 6.5% yield target

London-based SVG Investment Managers is preparing to launch the Strategic Equity Income trust, targeting a 6.5% yield. The fund will be run by UK smaller company managers Adam Steiner and Stuart Widdowson.

The pair already run the Strategic Equity Capital trust, the top performing UK smaller company investment trust over three years, which has delivered a 119.9% share price return compared with the 74.3% sector average.

The income trust, which will be listed in the UK, will seek to raise £70 million in ordinary shares and £30 million in zero-dividend preference shares.

While the ordinary shares will target a 6.5% dividend yield in the first calendar year, along with capital growth, the zero-dividend preference shares will have a 6% target yield on a five-year term.

The portfolio will comprise between 25 and 35 UK-quoted stocks, which fall within the £75 million and £1.25 billion investable sector. The trust will have a continuation vote after four years. The board of the trust is yet to be confirmed.

The fee structure is targeting a total expense ratio of 1.5%, with a performance fee of 10% of returns over 150p per share, capped at 1% of the trust's market value, which is not payable until year five.

At present, dividends from stocks on the FTSE Smaller Companies index are 3.7 times covered by earnings per share and 4.4 times cash covered.

1 comment so far. Why not have your say?

abbass hassan

Jun 25, 2012 at 18:59

looks to risky ?

report this

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

The Citywire guide to investment trusts

In association with Aberdeen Asset Management

Fund managers from Standard Life Investments quizzed on investment trusts


What can SLI bring to the table for those who want to put their money into investment trusts?

More about this:

Look up the investment trusts

  • Strategic Equity Capital (Ordinary Share)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them

What others are saying

Archive

Today's articles

Tools from Citywire Money

From the Forums

+ Start a new discussion

Weekly email from The Lolly

Get simple, easy ways to make more from your money. Just enter your email address below

An error occured while subscribing your email. Please try again later.

Thank you for registering for your weekly newsletter from The Lolly.

Keep an eye out for us in your inbox, and please add noreply@emails.citywire.co.uk to your safe senders list so we don't get junked.

Read more...

Fund fee fighters launch investments for ISA savers

on Sep 30, 2014 at 14:54

Sorry, this link is not
quite ready yet