Rights and Issues Investment Trust plc
The Board’s objective is to exceed the benchmark index over the long-term whilst managing risk. The Trust invests in equities with an emphasis on smaller companies. UK smaller companies will normally constitute at least 80% of the investment portfolio. UK smaller companies include both listed securities and those quoted on the Alternative Investment Market (“AIM”).
The investment portfolio will normally lie in the range of 80% to 100% of shareholders’ funds and therefore gearing will normally be between -20% and 0%. As a result of the Alternative Investment Fund Managers regulations 2013 it has been decided that the Company will not use gearing.
The Board continues with its long term strategy of seeking out undervalued investments that have characteristics consistent with a matrix of criteria developed by the Investment Director. This is supported by the 5 yearly review that addresses the above objective, the next being due in July 2016.
There is a rigorous process of risk analysis at the level of the individual investment based on the characteristics of the investee company. This controls the overall risk profile of the investment portfolio allowing a higher level of concentration in the investment portfolio.
The investment portfolio is then managed on a medium-term basis with a low level of turnover of investments. This minimises transaction costs and ensures a medium-term consistency of the investment approach.
The Board has been granted authorisation by the FCA to be its own AIFM.
Non Mainstream Investment Products
The Board notes the proposed changes to the FCA rules relating to the restrictions on the retail distribution of unregulated collective investment schemes and close substitutes which came into effect on 1 January 2014.
The Board confirms that it conducts its affairs, and intends to continue to conduct its affairs, so that the Company’s Income Shares will be excluded securities under these new rules and will therefore be excluded from the FCA’s restrictions which apply to non-mainstream investment products. The Company’s Shares are excluded securities because the Company is an investment trust.
Information and Forms
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