Important: What follows is not a recommendation to buy or sell the Rights and Issues Trust. I’m just a private investor, storing and sharing notes. Read my disclaimer.
Rights, Issues and complications
The Rights and Issues Trust is a tiny, £33 million split cap investment trust focusing on UK smaller companies. It invests in small companies listed on the main London market and on the AIM market.
Split cap trusts are investment trusts that distribute dividends and capital gains arising from the portfolio differently to different classes of shareholders, according to income and capital preferences. Sometimes they involve hurdles and other redemption clauses. Split caps got a bad name after many invested in each others’ shares during the dotcom boom, and subsequently saw magnified losses in the collapse.
As I understand it, the situation with the Rights and Issues Trust is much more straightforward, and from a structural point of view (i.e. not looking at its risky small company investments, which have performed terribly in the past 12 months) it’s as safe as any other investment trust.
Name: Rights and Issues Trust Ticker: RIII / RIIC Listed: London Business: Investment Trust (Split cap) More info: Digital Look / Google Finance Company: Rights and Issues website
The chairman and figurehead of the Rights and Issues Trust is former chess grandmaster, Simon Knott, who enjoys a certain cult following in some quarters for his share picking skills.
Getting into Rights and Issues
From an investor’s point of view, the Rights and Issues Trust basically consists of two listed securities, with the tickers RIIC and RIII, which respectively offer more Capital or Income exposure.