Got a credit card? use our Credit Card & Finance Calculators
Thanks to Anonymous,bruncher,niord,gvonge,Shelford, for Donating to support the site
Has an Investment Trust...
-
- Lemon Quarter
- Posts: 4859
- Joined: November 4th, 2016, 2:24 pm
- Has thanked: 4887 times
- Been thanked: 2131 times
Has an Investment Trust...
...ever gone bust?
If not, great, if so, how could this happen presuming the constituent companies haven't all gone bust at the same time?
Thanks,
Chris
If not, great, if so, how could this happen presuming the constituent companies haven't all gone bust at the same time?
Thanks,
Chris
-
- Lemon Half
- Posts: 6118
- Joined: November 5th, 2016, 9:05 am
- Has thanked: 21 times
- Been thanked: 1427 times
Re: Has an Investment Trust...
csearle wrote:...ever gone bust?
If not, great, if so, how could this happen presuming the constituent companies haven't all gone bust at the same time?
Excessive borrowing could do when the debt exceeds asset value, particularly if the investments were holdings in other investment trusts with excessive borrowings.
https://en.wikipedia.org/wiki/Split_cap ... ment_trust
http://news.bbc.co.uk/1/hi/business/4465039.stm
it's within the lifetime of TMF, so there may be archive material there as well.
-
- The full Lemon
- Posts: 16629
- Joined: October 10th, 2017, 11:33 am
- Has thanked: 4343 times
- Been thanked: 7536 times
Re: Has an Investment Trust...
I doubt that an investment trust would go bust in the normal sense. The definition of 'going bust' is surely that the liabilities exceed the assets. Most ITs limit the borrowings to a 'prudent' level but if the borrowings become imprudent and the assets suffer an unexpected drop in value then I suppose an IT could go bust.
Why not?
Alaric has just illustrated an issue where just that happened with interlocking shareholdings.
Dod
Why not?
Alaric has just illustrated an issue where just that happened with interlocking shareholdings.
Dod
-
- Lemon Half
- Posts: 7302
- Joined: November 24th, 2016, 3:29 am
- Has thanked: 1691 times
- Been thanked: 3891 times
Re: Has an Investment Trust...
csearle wrote:...ever gone bust?
If not, great, if so, how could this happen presuming the constituent companies haven't all gone bust at the same time?
Thanks,
Chris
I can think of four ITs at serious risk of going bust.
These are the four I recently purchased shares in, obviously
-
- Lemon Quarter
- Posts: 3242
- Joined: December 7th, 2016, 9:09 pm
- Has thanked: 366 times
- Been thanked: 1071 times
Re: Has an Investment Trust...
Many investment companies have been wound up. Usually in an orderly fashion.
IT's have the advantage that they don't have to pay out on demand, so they can take their time selling stuff and returning cash.
Does that count as "going bust", possibly, or possibly not.
IT's have the advantage that they don't have to pay out on demand, so they can take their time selling stuff and returning cash.
Does that count as "going bust", possibly, or possibly not.
-
- Lemon Quarter
- Posts: 1279
- Joined: November 4th, 2016, 10:42 am
- Has thanked: 236 times
- Been thanked: 417 times
Re: Has an Investment Trust...
csearle wrote:...ever gone bust?
If not, great, if so, how could this happen presuming the constituent companies haven't all gone bust at the same time?
Thanks,
Chris
Yes.
Check out the split capital investment trust crisis. About 2000-2002.
Aberdeen was a major culprit - by March 2002.....of the £25,000 that had been put into Aberdeen Asset Management's Leveraged Income Fund only £90 was left.
I wasn't actively investing at that time - phew! Just remember reading about it.
-
- The full Lemon
- Posts: 16629
- Joined: October 10th, 2017, 11:33 am
- Has thanked: 4343 times
- Been thanked: 7536 times
Re: Has an Investment Trust...
I forgot to mention the split capital ITs that went bust. The second trust called Yeoman for one because I held it. Split capital trusts were a decent investment if properly run giving the investor choice between capital or income but for some reason they began buying into each other and the whole thing became a disaster. Thanks 77ss.
Dod
Dod
-
- Lemon Pip
- Posts: 94
- Joined: November 12th, 2016, 11:35 am
- Has thanked: 96 times
- Been thanked: 67 times
Re: Has an Investment Trust...
For those with time on their hands, the full story of the split capital crisis is recorded in detail here.
https://epdf.pub/the-split-capital-inve ... eries.html
By the end of 2002 the shares in 19 investment trusts had been suspended.
https://epdf.pub/the-split-capital-inve ... eries.html
By the end of 2002 the shares in 19 investment trusts had been suspended.
-
- Lemon Quarter
- Posts: 2500
- Joined: November 18th, 2021, 11:57 am
- Has thanked: 2021 times
- Been thanked: 1223 times
Re: Has an Investment Trust...
Dod101 wrote:I forgot to mention the split capital ITs that went bust. The second trust called Yeoman for one because I held it. Split capital trusts were a decent investment if properly run giving the investor choice between capital or income but for some reason they began buying into each other and the whole thing became a disaster. Thanks 77ss.
Dod
Even worse, the splits (zeroes mainly) were marketed to an unsophisticated buying community as low risk investments. When, as we all now know, they were nothing of the sort.
At the time, I did quite well out of a couple of split cap trusts. It was a shame the whole sub sector was trashed through band wagon jumping corporate greed.
-
- The full Lemon
- Posts: 16629
- Joined: October 10th, 2017, 11:33 am
- Has thanked: 4343 times
- Been thanked: 7536 times
Re: Has an Investment Trust...
BullDog wrote:Dod101 wrote:I forgot to mention the split capital ITs that went bust. The second trust called Yeoman for one because I held it. Split capital trusts were a decent investment if properly run giving the investor choice between capital or income but for some reason they began buying into each other and the whole thing became a disaster. Thanks 77ss.
Dod
Even worse, the splits (zeroes mainly) were marketed to an unsophisticated buying community as low risk investments. When, as we all now know, they were nothing of the sort.
At the time, I did quite well out of a couple of split cap trusts. It was a shame the whole sub sector was trashed through band wagon jumping corporate greed.
As a matter of fact, I think they were a low risk investment when run properly. The problem was that, led I think by Aberdeen as was they started buying into each other and it became the so called 'magic circle'. The original Yeoman did well for me. I held their Zero Dividend shares and as the gain was classified as a capital gain I got the profit tax free. I had others but I have forgotten the names now. The Second Yeoman got caught up in the magic circle and went bust.
Dod
-
- Lemon Quarter
- Posts: 2500
- Joined: November 18th, 2021, 11:57 am
- Has thanked: 2021 times
- Been thanked: 1223 times
Re: Has an Investment Trust...
Dod101 wrote:BullDog wrote:Dod101 wrote:I forgot to mention the split capital ITs that went bust. The second trust called Yeoman for one because I held it. Split capital trusts were a decent investment if properly run giving the investor choice between capital or income but for some reason they began buying into each other and the whole thing became a disaster. Thanks 77ss.
Dod
Even worse, the splits (zeroes mainly) were marketed to an unsophisticated buying community as low risk investments. When, as we all now know, they were nothing of the sort.
At the time, I did quite well out of a couple of split cap trusts. It was a shame the whole sub sector was trashed through band wagon jumping corporate greed.
As a matter of fact, I think they were a low risk investment when run properly. The problem was that, led I think by Aberdeen as was they started buying into each other and it became the so called 'magic circle'. The original Yeoman did well for me. I held their Zero Dividend shares and as the gain was classified as a capital gain I got the profit tax free. I had others but I have forgotten the names now. The Second Yeoman got caught up in the magic circle and went bust.
Dod
I agree with you. I recall there was a bunch of charlatans out there called Whitechurch or something who were a real hard sell on splits at that period. They, amongst others no doubt, pumped up the debacle with the public aided and abetted by investment houses who should have darn well known better. Splits were a pretty useful vehicle for a number of purposes. A shame what happened to them.
-
- The full Lemon
- Posts: 16629
- Joined: October 10th, 2017, 11:33 am
- Has thanked: 4343 times
- Been thanked: 7536 times
Re: Has an Investment Trust...
BullDog wrote:Dod101 wrote:BullDog wrote:Even worse, the splits (zeroes mainly) were marketed to an unsophisticated buying community as low risk investments. When, as we all now know, they were nothing of the sort.
At the time, I did quite well out of a couple of split cap trusts. It was a shame the whole sub sector was trashed through band wagon jumping corporate greed.
As a matter of fact, I think they were a low risk investment when run properly. The problem was that, led I think by Aberdeen as was they started buying into each other and it became the so called 'magic circle'. The original Yeoman did well for me. I held their Zero Dividend shares and as the gain was classified as a capital gain I got the profit tax free. I had others but I have forgotten the names now. The Second Yeoman got caught up in the magic circle and went bust.
Dod
I agree with you. I recall there was a bunch of charlatans out there called Whitechurch or something who were a real hard sell on splits at that period. They, amongst others no doubt, pumped up the debacle with the public aided and abetted by investment houses who should have darn well known better. Splits were a pretty useful vehicle for a number of purposes. A shame what happened to them.
I think there are still a few split trusts around but I have not taken a look for a long time. Someone may come up with some current names.
Dod
-
- Lemon Slice
- Posts: 425
- Joined: October 12th, 2018, 5:01 pm
- Has thanked: 46 times
- Been thanked: 407 times
Re: Has an Investment Trust...
LittleDorrit wrote:For those with time on their hands, the full story of the split capital crisis is recorded in detail here.
https://epdf.pub/the-split-capital-inve ... eries.html
By the end of 2002 the shares in 19 investment trusts had been suspended.
From that link in the book you have the below. I worked for Fundamental Data at the time and designed that site! Good times!
"One of the most comprehensive and timely sources of such data is the ‘‘Splitsonline’’ site (www.splitsonline.co.uk) from Fundamental Data Ltd,which provides daily analysis of split capital investment trusts."
-
- Lemon Slice
- Posts: 425
- Joined: October 12th, 2018, 5:01 pm
- Has thanked: 46 times
- Been thanked: 407 times
Re: Has an Investment Trust...
Dod101 wrote:BullDog wrote:Dod101 wrote:
As a matter of fact, I think they were a low risk investment when run properly. The problem was that, led I think by Aberdeen as was they started buying into each other and it became the so called 'magic circle'. The original Yeoman did well for me. I held their Zero Dividend shares and as the gain was classified as a capital gain I got the profit tax free. I had others but I have forgotten the names now. The Second Yeoman got caught up in the magic circle and went bust.
Dod
I agree with you. I recall there was a bunch of charlatans out there called Whitechurch or something who were a real hard sell on splits at that period. They, amongst others no doubt, pumped up the debacle with the public aided and abetted by investment houses who should have darn well known better. Splits were a pretty useful vehicle for a number of purposes. A shame what happened to them.
I think there are still a few split trusts around but I have not taken a look for a long time. Someone may come up with some current names.
Dod
There are a few companies with ZDPs still. But they are not splits in the real, traditional sense. No Incs or Caps any more either. Full list of companes with ZDPs here.
https://www.theaic.co.uk/aic/find-compa ... -analytics
-
- Lemon Half
- Posts: 6118
- Joined: November 5th, 2016, 9:05 am
- Has thanked: 21 times
- Been thanked: 1427 times
Re: Has an Investment Trust...
Dod101 wrote:I think there are still a few split trusts around but I have not taken a look for a long time. Someone may come up with some current names.
There aren't very man left and they all seem to have maturity dates in the near future. .
https://www.theaic.co.uk/aic/find-compa ... -analytics
-
- Lemon Half
- Posts: 7973
- Joined: November 4th, 2016, 11:24 am
- Has thanked: 7 times
- Been thanked: 3071 times
Re: Has an Investment Trust...
DavidM13 wrote:There are a few companies with ZDPs still. But they are not splits in the real, traditional sense. No Incs or Caps any more either. Full list of companes with ZDPs here.
https://www.theaic.co.uk/aic/find-compa ... -analytics
Sorry to revive an old thread, but how do I navigate to the ZDP Analytics page on the AIC site? I went looking for it and I'm probably missing something that's right there and obvious but I couldn't find a way of getting to it and had to search this site to find your post here for the link to it....
-
- Lemon Slice
- Posts: 425
- Joined: October 12th, 2018, 5:01 pm
- Has thanked: 46 times
- Been thanked: 407 times
Re: Has an Investment Trust...
mc2fool wrote:DavidM13 wrote:There are a few companies with ZDPs still. But they are not splits in the real, traditional sense. No Incs or Caps any more either. Full list of companes with ZDPs here.
https://www.theaic.co.uk/aic/find-compa ... -analytics
Sorry to revive an old thread, but how do I navigate to the ZDP Analytics page on the AIC site? I went looking for it and I'm probably missing something that's right there and obvious but I couldn't find a way of getting to it and had to search this site to find your post here for the link to it....
Right near the bottom of the research tools section there is a block in the middle where you can access it https://www.theaic.co.uk/research-tools. The block is called "ZDP analytics" and is just above the sign up sheet on the page I mention above.
-
- Lemon Half
- Posts: 7973
- Joined: November 4th, 2016, 11:24 am
- Has thanked: 7 times
- Been thanked: 3071 times
Re: Has an Investment Trust...
DavidM13 wrote:mc2fool wrote:DavidM13 wrote:There are a few companies with ZDPs still. But they are not splits in the real, traditional sense. No Incs or Caps any more either. Full list of companes with ZDPs here.
https://www.theaic.co.uk/aic/find-compa ... -analytics
Sorry to revive an old thread, but how do I navigate to the ZDP Analytics page on the AIC site? I went looking for it and I'm probably missing something that's right there and obvious but I couldn't find a way of getting to it and had to search this site to find your post here for the link to it....
Right near the bottom of the research tools section there is a block in the middle where you can access it https://www.theaic.co.uk/research-tools. The block is called "ZDP analytics" and is just above the sign up sheet on the page I mention above.
Ah, ok, thanks. Not so obvious then ... it isn't obvious that clicking on "RESEARCH TOOLS" will get you a page showing more research tools than is presented by the menu that pops up when you move the mouse over "RESEARCH TOOLS"!
I was also confused (after following your zdp-analytics link) that the ZDP Analytics page says:
"You are here: Home » Compare investment Companies » ZDP Analytics"
which led me to carefully eyeballing, in vain of course, the whole of the Compare investment Companies page looking for a link to ZDP Analytics, as that's what the You are here implies.....
Return to “Investment Trusts and Unit Trusts”
Who is online
Users browsing this forum: No registered users and 28 guests