Zero dividend preference shares might be issued by which type of investment vehicle?

• A. Growth funds
• B. Split-capital investment trusts
• C. Unit trusts
• D. Exchange-traded funds

Answer: (B)

Zero dividend preference shares are a fixed-maturity, no-dividend instrument that is typically paired with a structure that creates different share classes to tailor risk and return. Split-capital investment trusts are designed to offer multiple classes of shares, including zero dividend preference shares, so investors can choose a fixed future payout at a set date rather than ongoing income. This combination allows the trust to create a capital-focused class whose primary goal is delivering a predetermined amount at maturity, with no interim dividend payments. Growth funds, unit trusts, and exchange-traded funds generally focus on capital growth, open-ended unit issuance, or trading on an exchange, and do not issue ZDP-style shares as a standard feature. Therefore, zero dividend preference shares are most associated with split-capital investment trusts.