To invest primarily in above-average yielding UK equities but up to 20% of the portfolio may be invested in equities listed on recognized stock exchanges outside the UK. If considered appropriate, the Company may use equity related instruments such as convertible securities and up to 10% of the portfolio may be invested in bonds. In addition, up to 20% of total income may be generated by short-dated call options written on holdings in the portfolio.
Management fee will be charged at the rate of 0.65% p.a. on the first GBP 200m and 0.55% p.a. on subsequent managed asset. The management fee is allocated 50% to revenue and 50% to capital. Notice period is 12 months.
The Directors of the Company intend to continue to pay four interim dividends at the end of January, April, July and October in each year. Although it is intended to distribute substantially all of the net income of Company after expenses and taxation,the Company may retain up to a maximum of 15% of the gross income of the Company in each year as a revenue reserve to provide consistency in dividend policy.