The boards of investment trusts want to return excess liquidity to shareholders, but what is the best way to do it? David Horner, co-manager of the Chelverton Growth and Small Companies Dividend trusts, offers some answers.
Since the financial upheaval in 2007 and 2008, and the consequent reduction in the Bank of England base rates to 0.5%, the source of income for investors has had to be re-evaluated. Once it became clear this reduction in interest rates to an all-time low was not merely a ‘blip’ but would be a feature for some time, things had to change. Savings have produced virtually no income for five years and, consequently, investors have been searching for new sources of income that hitherto might not have been on their usual list. Coupled with a natural reluctance by the boards of companies i...
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