Overview

Please bear in mind that all investments involve risk and the value of, and any potential income from, your investment may fluctuate and are not guaranteed.

Rights and Issues Investment Trust PLC (‘the Company’) is a London listed closed ended investment company which invests in a portfolio of primarily UK Small and Mid-cap companies.

Change of lead manager

The Board announced on May 10 that Dan Nickols, head of Jupiter’s UK Small and Mid-Cap (“SMID”) equities team and current co-manager of Rights and Issues Investment Trust (the “Company”), has informed Jupiter of his intention to retire with effect from 30 June 2024.

Following Dan’s retirement Matt Cable, who currently acts as co-manager, will become lead manager of the Company’s portfolio, thereby ensuring continuity of the investment services provided by Jupiter to the Company. Mr Cable will be supported as manager by Tim Service who has been promoted by Jupiter to serve as head of the SMID equities team following Mr Nickol’s retirement. Dr Andrew Hosty, Chairman commented “Whilst we are sorry to learn of Dan’s intention to retire, we have full confidence in the team’s succession plan and look forward to continuing the Company’s relationship with Jupiter.
Read more here: Investment Management Personnel Changes

Investment objective & policy

The Board’s objective is to exceed the benchmark index over the long term whilst managing risk. The benchmark of the Company is the FTSE All Share in Index.

The Company invests in equities with an emphasis on smaller companies. UK smaller companies will normally constitute at least 80% of the investment portfolio. UK smaller companies include both listed securities and those quoted on the Alternative Investment Market (“AIM”).

The investment portfolio will normally lie in the range of 80% to 100% of shareholders’ funds. The Company will continue with its policy of not employing leverage.

In January 2021 the Board reviewed the performance of the Company in the context of the investment objective, the investment policy and the continuation of the Company. The Directors unanimously supported the continuation for a minimum period of five years to 2026.  
The trust’s investment focus and strategy
Top down and bottom-up process

Matt and Tim operate a blended top down and bottom-up approach to stock selection. They use a macroeconomic framework which considers key UK and global economic indicators, which then determines their thematic and sectorial exposure over time.

 

Their stock selection process is embedded in fundamental bottom-up research of companies, utilizing their own primary and third-party investment bank research to understand and assess the prospects for companies.

 

They are focussed on investing in companies which are operated by high quality management teams with strong track-records of execution, and which are fundamentally mispriced.

Style agnostic
The investment management team are style agnostic, which means they build portfolios of companies which exhibit both growth and value characteristics across the small and mid-cap universe.
Portfolio construction
They are seeking to build a high conviction, concentrated portfolio of companies, providing investors with exposure to high-quality, innovative businesses that have developed best-in-class business models. This allows the team to take a longer-term view, holding companies which are less liquid than they would hold in an open-end fund, and which they can commit to holding for a long period of time.

The principal risks are as follows:

  • Market risk – the portfolio will be invested predominantly in listed equities and therefore will be exposed to a range of market risks including economic conditions, market disruptions, accuracy of company information, global health crises, competition and volatility
  • Idiosyncratic risk – the portfolio will be concentrated and therefore will be exposed to the idiosyncratic risks of each underlying investment
  • The portfolio will be exposed to liquidity risk given the focus on smaller companies.
  • The portfolio will be exposed to interest rate risk both as a consequence of any financial leverage within the underlying investments and as a consequence of the impact of interest rates on the market valuation of companies.
  • Currency exposure – The portfolio may invest in companies whose revenues, profits and / or balance sheets may have exposure to foreign currencies.
  • New issues – The AIFM on behalf of the Company may invest in new issues which can pose additional risks related to transient illiquidity, lack of trading history and concentration of ownership.
  • Corporate management and financial reporting risk – The AIFM relies on financial information made available by the companies in which it invests. This information may not be independently verified by the AIFM. Corporate mismanagement, fraud and accounting irregularities relating to the underlying investments may result in material losses.

Meet the team