12 investment trusts face continuation votes

Twelve investment trusts have continuation votes coming up over the next couple of weeks, which provides shareholders with the opportunity to have their say on whether it should continue or be wound up. 

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Data from the Association of Investment Companies (AIC) shows that Impax Environmental Markets (LSE:IEM) and US Solar Fund (LSE:USF) have continuation votes taking place today (20 May). This is followed by continuation votes at Fidelity Japan Trust (LSE:FJV) and BlackRock World Mining Trust (LSE:BRWM) tomorrow (21 May), then Nippon Active Value (LSE:NAVF) and Downing Renewables & Infrastructure (LSE:DORE) both on 5 June. The full table of upcoming continuation votes are outlined below.

Continuation votes are a permanent feature for some investment trusts, occurring once a year or every two, three or five years. 

In other cases, a continuation vote is triggered if a trust persistently performs poorly or has for long periods traded on a wide discount. The former usually leads to the latter.

In addition, a continuation vote can be called by disgruntled shareholders. Under the Companies Act 2006, the required percentage of share capital that must be held by a group of shareholders to be able to requisition a general meeting is 10%. 

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Two high profile examples of investment trusts that have recently failed continuation votes are Schroders Capital Global Innovation, formerly known as Woodford Patient Capital, and JPMorgan Global Core Real Assets. In both cases disappointing performance led shareholders to call time.

In addition to those listed in the table above, a further 16 investment trusts are expected to hold continuation votes before the end of 2025, with the dates yet to be announced. 

Continuation votes are one of features that set investment trusts apart from funds. In addition, investment trusts have independent board of directors. It is their job to exercise independent oversight, hold fund managers to account (including the ability to sack them) and look after the interests of shareholders (such as by driving down costs).  

In addition, as a shareholder in an investment trust you have the same voting rights as shareholders in other companies. This gives you the opportunity to have your say and exert influence.

With funds, you don’t get much of a say, and if you are unhappy with how the fund is investing or performing, pretty much your only option is to vote with your feet.

At interactive investor, we have for a number of years been campaigning to raise awareness of shareholder voting and are encouraging our customers to use their voting rights. 

In November 2021, interactive investor made the ability to cast shareholder votes online a default option for all customers, rather than them having to opt-in to use the platform’s voting capability (but customers can opt out if they wish).  Those opted out can return at any time by updating their preferences and ticking the subscribe checkbox.  

interactive investor customers can cast votes via the Voting Mailbox in their online account (under “portfolio” at the top of the page). Our customers also receive notifications through their ii app “voting mailbox” service, informing them when they are eligible to place a vote 

Upcoming continuation votes

Source: theaic.co.uk and Morningstar. Excludes companies in realisation and VCTs.