Money: For good returns, add some zeros

My favourite investment: top tips each month from a City expert

Nigel Sidebottom is a director at BFS Investments in Surrey, an independent group specialising in running investment trusts.

Nigel Sidebottom was born into a stockbroking family. His father was a partner in a small firm looking after private clients. "I made a conscious decision not to join him, being happy in town planning, until he told me about the difficulty his firm was having in recruiting a junior assistant," he says.

"When I found how much was being offered - more than I was getting after nine years in my own profession - I decided to change career and moved into stockbroking."

When it comes to looking after his own investments Mr Sidebottom is cautious: "I've stayed mainly with the investment trust sector. I've now spent too many years in the business to fall for any whispered stories about individual stocks. With my own money I tend to invest in a mix of very low and very high-risk investment trust shares. I buy zero-dividend preference shares, where my money is very safe, and also warrants and other highly geared funds."

One of his best decisions was buying shares in what was then known as TR Technology: "The fund was very highly geared, meaning it had a large amount of borrowings, and I felt it was undervalued. It was on a discount of around 20 per cent to net asset value. Investing in hi-tech stocks was obviously a high-risk strategy, but I felt the investment trust was very attractively priced."

Its price went on to rise 14-fold. Last year, at the end of the fund's life, investors had the chance to roll up into its successor fund, now renamed Henderson Technology, or take out their money at net asset value. "I felt my hand had played out, and sold up," says Mr Sidebottom. "But I should have moved into the new fund as it has more than doubled in price since I took my money out."

He recently bought warrants in Herald Investment Trust, a fund that invests in smaller UK technology firms. "I'm not really a technology fan. The reason I bought the warrants is that the fund is managed by Katie Potts, a former stockbroking analyst I respected. And I was right to do so as I have more than doubled the value of my investment."

As their name suggests, zero dividend preference shares pay no dividend. But they do prom-ise a fixed payout at the end of their limited shelf life. "These may not be exciting," says Mr Sidebottom, "but you get a good return net of tax. I'm a huge fan of the sector, where it's presently easy to earn over 8 per cent net a year. I'd advise anyone with surplus cash to buy them. It can be far more tax efficient than sticking the money in a bank."

Not all his investments are in trusts. "I'm married to a Croatian and I've spent a lot of money on my family's holiday home on the Istrian peninsular near Italy," he says. "It could turn into a very valuable asset. At present, foreigners aren't allowed to own property in Croatia. But in time the ownership rules could be relaxed, especially if Croatia wants to join the EU. There will probably be great demand for holiday homes then, especially from Italians. So it could be worth a lot more than it is now."

WHO'S WHO: NIGEL SIDEBOTTOM

Aged 47.

Studied business and economics at Sheffield University before going on to a master's degree in town planning.

Seven years in local authority sector as a town planner.

Joined a small firm of private-client stockbrokers (where his father worked) as a junior assistant.

After two years, he moved to Gerrard Vivian Gray, which was eventually taken over by Greig Middleton, the UK's largest private-client stockbroker.

There he began to specialise in the trust sector, setting up the firm's investment trust service, and became head of the group's asset management service.

In March this year he became a Surrey-based director of BFS Investments, with pounds 700m under management.The group specialises in split-capital investment trusts.

PROMOTED VIDEO
Voices
Ukip leader Nigel Farage arrives at the Rochester by-election count
voicesIs it any wonder that Thornberry, Miliband, and Cameron have no idea about ordinary everyday life?
Sport
sportComment: Win or lose Hamilton represents the best of Britain
Life and Style
tech
News
ebooksNow available in paperback
Sport
Arsene Wenger reacts during Arsenal's 2-1 defeat to Swansea
footballMan United and Arsenal meet on Saturday with both clubs this time languishing outside the top four
News
i100BBC political editor Nick Robinson had a lot of explaining to do
Life and Style
Nappies could have advice on them to encourage mothers and fathers to talk to their babies more often
newsTalking to babies can improve their language and vocabulary skills
Sport
Tony Bellew holds two inflatable plastic sheep at the weigh-in for his rematch with Nathan Cleverly
boxingGrudge match takes place on Saturday night
Arts and Entertainment
Mark Ronson at PS1
arts + ents
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Reach Volunteering: Trustee – PR& Marketing, Social Care, Commercial skills

Voluntary Only - Expenses Reimbursed: Reach Volunteering: Age Concern Slough a...

Reach Volunteering: Charity Treasurer

Voluntary Only - Expenses Reimbursed: Reach Volunteering: Crossroads Care is s...

SThree: Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £35,000: SThree: We consistently strive to be ...

Ampersand Consulting LLP: Markit EDM (CADIS) Developer

£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...

Day In a Page

US immigration: President Obama ready to press ahead with long-promised plan to overhaul 'broken system' - but will it get past a Republican-controlled Congress?

Immigration: Obama's final frontier

The President is ready to press ahead with the long-promised plan to overhaul America's 'broken system' - but will it get past a Republican-controlled Congress?
Bill Cosby rape allegations explained: Why are these allegations coming out now? Why didn’t these women come forward earlier? And why has nobody taken legal action?

Bill Cosby rape allegations explained

Why are these allegations coming out now? Why has nobody taken legal action? And what happens next for the man once thought of as 'America's Dad'
Four years of excruciating seizures caused by the 1cm tapeworm found burrowing through a man's brain

You know that headache you’ve got?

Four years of excruciating seizures caused by the 1cm tapeworm found burrowing through a man's brain
Travelling to work by scooter is faster than walking and less sweaty than cycling, so why aren’t we all doing it?

Scoot commute

Travelling to work by scooter is faster than walking and less sweaty than cycling, so why aren’t we all doing it?
Paul Robeson: The story of how an American icon was driven to death to be told in film

The Paul Robeson story

How an American icon was driven to death to be told in film
10 best satellite navigation systems

Never get lost again: 10 best satellite navigation systems

Keep your vehicle going in the right direction with a clever device
Paul Scholes column: England must learn to keep possession and dictate games before they are exposed by the likes of Germany and Brazil

Paul Scholes column

England must learn to keep possession and dictate games before they are exposed by the likes of Germany and Brazil
Michael Dawson: I’ll thank Spurs after we win says defender as he prepares to return with Hull

Michael Dawson: I’ll thank Spurs after we win

Hull defender faces his struggling former club on Sunday ready to show what they are missing. But he says he will always be grateful to Tottenham
Frank Warren column: Dr Wu has big plans for the professionals yet he should stick to the amateur game

Frank Warren column

Dr Wu has big plans for the professionals yet he should stick to the amateur game
Synagogue attack: Fear unites both sides of Jerusalem as minister warns restoring quiet could take 'months'

Terror unites Jerusalem after synagogue attack

Rising violence and increased police patrols have left residents of all faiths looking over their shoulders
Medecins sans Frontieres: The Ebola crisis has them in the headlines, but their work goes far beyond West Africa

'How do you carry on? You have to...'

The Ebola crisis has Medecins sans Frontieres in the headlines, but their work goes far beyond West Africa
Isis extends its deadly reach with suicide bombing in Kurdish capital

Isis extends its deadly reach with suicide bombing in Kurdish capital

Residents in what was Iraq’s safest city fear an increase in jihadist attacks, reports Patrick Cockburn
Underwater photography competition winners 2014 - in pictures

'Mysterious and inviting' shot of diver wins photography competition

Stunning image of cenote in Mexico takes top prize
Sir John Major: Negative West End portrayals of politicians put people off voting

Sir John Major hits out at theatres

Negative West End portrayals of politicians put people off voting
Kicking Barbie's butt: How the growth of 3D printing enabled me to make an army of custom-made figurines

Kicking Barbie's butt

How the growth of 3D printing enabled toy-designer to make an army of custom-made figurines