True value inhedging

Having devised a new form of zero coupon financing, Glasgow Investment Managers found a hedging strategy benefitting from the lows of the FTSE 100 brought added value to investors

In 2000, economic conditions and the UK equity market had changed considerably from 10 years earlier. Retail price inflation, 9.5% in 1990, was down to about 2%; clearing bank base rates were down from 15% to about 6% and the yield on the All-Share Index had fallen from 5% to below 2.5%. The yields on the three high-yield trusts managed by Glasgow Investment Managers had also fallen ' Shires Income to 4.3%, Glasgow Income Trust to 4.6% and Shires Smaller Companies to 4.4%. These yields were high relative to the All-Share Index yield but they were not competitive with those on other invest...