Return of Capital Distribution Raises Questions on AIQ’s Financial Outlook
Alternative Investment Trust (ASX, AIQ) has announced a special unfranked distribution of 3.559 cents per unit, representing a full return of capital payable in February 2026.
- Special unfranked distribution of AUD 0.03559 per unit
- 100% return of capital distribution
- Ex-date set for 28 January 2026, payment on 13 February 2026
- Dividend Reinvestment Plan not applicable for this distribution
- No external approvals required for payment
Special Distribution Announcement
Alternative Investment Trust (ASX, AIQ) has declared a special distribution of 3.559 cents per ordinary unit, scheduled for payment on 13 February 2026. This distribution is notable for being a 100% return of capital, rather than a typical income dividend, and is unfranked, meaning it carries no Australian franking credits.
Key Dates and Details
The ex-distribution date is set for 28 January 2026, with the record date following on 29 January 2026. Securityholders on the register as of the record date will be entitled to receive the payment. Importantly, the trust’s Dividend Reinvestment Plan (DRP) will not apply to this distribution, so investors will receive the payment in cash rather than reinvesting in additional units.
Implications of a Return of Capital
A return of capital distribution typically indicates that the trust is returning part of the original investment to securityholders, rather than distributing profits or income. This can have implications for the unit price, as the net asset value of the trust may be adjusted downward by the amount returned. Investors should consider how this affects their cost base and potential tax treatment, as unfranked returns of capital are generally treated differently from income dividends.
No External Approvals Required
The announcement confirms that no external approvals, such as securityholder, court, or regulatory consents, were necessary to proceed with this distribution. This suggests the trust’s board and management are confident in the financial position to make this return without additional oversight or conditions.
Looking Ahead
While the announcement is clear on the distribution mechanics, it does not provide insight into the rationale behind the return of capital or its impact on the trust’s asset base and future earnings capacity. Investors and analysts will be watching closely for subsequent financial disclosures and market reactions to better understand the trust’s strategy and outlook.
Bottom Line?
This special return of capital distribution marks a pivotal moment for AIQ investors, prompting close attention to the trust’s financial health and future income prospects.
Questions in the middle?
- What is the underlying reason for the 100% return of capital distribution?
- How will this distribution affect the trust’s net asset value and unit price?
- What are the tax implications for investors receiving an unfranked return of capital?
