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FAQs

What is an investment trust?

Investment Trusts are quoted companies listed on the London Stock Exchange. They are subject to the listing rules of the UK Listing Authority under the Financial Services and Markets Act. An investment trust invests in shares and securities of other companies that trade on stock markets. The Aurora Investment Trust is a closed end fund. Closed end means that when you want to invest you have to buy shares in the stock market and when you want your money back you have to sell them in the same way. 

What is the role of the investment manager?

The investment manager has responsibility for the daily operations of the Trust and its portfolio. They are the decision-makers regarding where to invest capital held by the Trust, and when to sell. The investment manager drives the strategy for enabling the Trust to reach its investment objectives.

What is the role of the Board?

An independent board of directors is responsible for oversight of the Trust. The board is also responsible to shareholders and oversees the relationship with the investment manager to ensure that the Trust’s objectives are met.

What is net asset value (NAV)?

The NAV is the value per share of all the assets owned by an investment trust. Net asset value is calculated as the value of the trust’s holdings, plus cash and income, less any borrowings and charges. If the trust’s assets increase in value, the NAV will grow, and likewise if the assets decrease in value, the NAV will decrease.

What are premiums and discounts?

Often the trust’s share price will differ from the NAV. If the share price is above the NAV, the trust is described as trading at a premium. When the share price is below the NAV, the trust is trading at a discount.

Will a discount control mechanism be utilised?

While we will not operate a mechanical discount control system we do plan to do a number of things to help the NAV and the share price to converge. We plan to act on a medium term basis, not short term. These actions include share buybacks, transparent reporting and the development of long term regular buying interest.

What is the mid price?

The mid price is the average of the closing buy and sell prices. An investment trust’s underlying investments are valued at the mid prices of the previous day’s closing.

What is the dividend policy?

It is a requirement of HMRC that an investment trust distribute at least 85% of its net income and we intend to comply with that minimum. Therefore the dividend will be a function of the dividends paid by the companies we own and the Trust cost base.

Will the Trust use gearing?

The Aurora Investment Trust will not make use of gearing or leverage.

How can I invest?

Aurora Investment Trusts’ shares are traded on the London Stock Exchange. They can be bought by placing an order with a stockbroker or by asking a professional adviser to do so. If you are not sure whether an investment trust is the right investment for you, it is recommended that you speak to a financial adviser.

Who should invest?

The Aurora Investment Trust is a long-term investment vehicle, which is appropriate for those with at least a three year time horizon when making an investment. It is aimed at investors looking for a predominantly UK equities manager with a business and value orientated approach, achieved through investments in companies demonstrating a high return on capital and control over their profitability through the strength of their business franchise.

Aurora is managed by Phoenix Asset Management Partners which has a unique approach to long term investing and will appeal to those who appreciate this approach to investing and business.

Aurora’s portfolio is concentrated, and it typically invests in a small number of deeply researched stocks, which can result in above average volatility. An investment in Aurora may be best suited to investors with at least an underlying knowledge of equity investments.

The Trust is measured against a benchmark but does not follow the benchmark in its portfolio construction. It is intended for investors looking for capital appreciation rather than income, and while it does distribute a dividend, this is not the strategic aim of its investment approach.

If you are not sure whether an investment trust is right for you, it is recommended that you speak to a financial adviser.

For further information, please read the Aurora Primer.