Morningstar's Tom Treanor on how investment company warrants can benefit investors
Investment company warrants offer investors the option to buy into a fund at a pre-determined price, and can result in outsized returns for clued-up investors. After a period in the doldrums, this asset class (and their Isa-able cousins, Subscription Shares) have been staging a comeback with many new investment company shares being issued with warrants attached. Warrants are non-voting, non-dividend paying listed securities issued primarily by investment companies. They offer the holder the right, but not the obligation, to purchase the company’s ordinary shares (Ords) at a pre-determ...
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