Weighing the up the real risks ofzeros

In volatile market conditions, the investment trust industry must repair damage done to the reputation of zeros

The zero dividend preference share was conceived after the 1987 stock market crash, their innovative structures providing investors with a low-risk investment at a time of volatile markets. Since launch, zeros have established an enviable track record and demand for this type of security has boomed. Originally used for school fee-planning, their applications expanded to providing for mortgages and pension drawdown. However, investors will be rightly alarmed with the volatility of zeros in the past few months. Often marketed as alternatives to bonds or bank deposits, recent collapses in th...