Zeros

Zeros can be particularly attractive for investors who do not generally utilise their annual CGT allowances (£10,100 for 2009/10 tax year), since it will often be possible to obtain the return 'tax free'.

For a top rate tax payer who does not utilise his CGT allowances, a return of, say, 6% from a zero is the equivalent to a return of 10% from an interest bearing account.

The quality of Zeros varies considerably and this is usually reflected in the yields. The lowest yields are typically offered by Zeros which have a high level of 'cover' and no bank debt or other prior charges. In the case of Zeros which are not fully covered the notional yield may well be hypothetical. We use yields calculated by Fundamental Data Ltd on various assumptions as a useful way of comparing individual stocks.

We strongly advise investors to seek professional independent advice before buying individual Zeros.

Zeros Search

Manager of the Month

Martin Lau

First State Greater China Growth

Career MRI 99.0%

Though Fidelity’s Anthony Bolton is currently making headlines with his new China fund, First State’s Martin Lau already has a successful track record in the region dating back to 1998. Born in Hong Kong, Lau studied engineering at Cambridge University then started his career at Invesco Perpetual before joining First State in 2002. Lau works in the Asia Pacific team under the legendary Angus Tulloch and is tipped by many as a Tulloch’s possible successor. Lau's four star rated First State Greater China Growth fund offers exposure to Hong Kong and Taiwan as well as mainland China, and has achieved strong outperformance whilst offering some downside protection in what is a volatile region for investors.

View manager record