F&C: Zeros set for resurgence

This year could see a resurgence in the issuance of zero dividend preference shares (ZDPs) following the success of recent issues, F&C says.

Peter Hewitt, manager of the F&C Progressive Growth fund, says demand for the recent launch of Aberforth Geared Income trust bodes well for the sector. "Aberforth is the first new conventional split-capital trust launch in 10 years. The thirty million zeros which have been issued were substantially oversubscribed, which shows the level of demand," he says. "The success of the Aberforth launch clears the way for more issuance of ZDPs. There were five new issues in the second half of 2009 and we have just had a sixth so do not be surprised if we see more." Hewitt says zeros have par...