The value of investments can fall as well as rise and you could get back less than you invest. If you’re not sure about investing, seek independent advice.
What are new issues?
New issues come in three main forms: Initial Public Offerings (IPOs), share offers and New Retail Bond Issues.
- IPOs generally mark the first sale of 'stock' (shares) by a privately owned company in order to gain a listing on the stock market. When you invest in an IPO, you buy shares at the ‘initial offer price’. This means you hold shares in the company from the earliest opportunity, giving your investment the longest possible time to do well.
- Share offers, sometimes called share issues or further issues, are an additional sale of shares by an already publically-listed company who has previously sold stock via an IPO.
- New Retail Bond Issues are sometimes called Fixed Income new Issues. They are new bonds issued by existing companies and are issued to raise money for the company. When you invest in these, you receive fixed interest payments in return for your investment. Your capital will also be repaid at a set date, known as the redemption date.
Things to remember:
- Investments can fall in value and you may get back less than you invest
- Tax rules may change and whether they benefit you depends on your individual circumstances
- Investing in new issues carries a high degree of risk as the value of your investment may fall significantly after the new issues becomes available on the market
- You should only decide to invest in a new issue based on the information contained with the offer prospectus, published by the issuing company
- You won’t pay stamp duty if you invest in an IPO, so your overall investments costs would be lower than buying the same value of stocks on the secondary market.
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The value of investments can fall as well as rise and you could get back less than you invest. If you’re not sure about investing, seek independent advice.
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