The trust, which is a European equities income option in our Super 60 rated list, has been placed under formal review owing to a proposed merger with JPMorgan European Growth investment trust.
JPMorgan European Income (LSE:JETI) investment trust, which features as a European equities income option in our Super 60, has been placed under formal review due to the proposed merger with JPMorgan European Growth (LSE:JETG) investment trust.
Dzmitry Lipski, Head of Funds Research, interactive investor, says: “The JPMorgan European Income investment trust, which features as a European equities income option in our Super 60, has been placed under formal review due to the proposed merger with JP Morgan European Growth investment trust.
“The trust is unusual in that it has two portfolios of assets; one income-oriented and the other designed to produce capital growth.
“However, going forward (subject to shareholder approval) there will no longer be two portfolios of assets. The trust’s board has announced that it plans to merge the income shares and growth shares into one entity.”
Going forward, the trust’s investment objective will be the same as the growth shares, resulting in an increased focus on capital growth for those investors in the income shares. As part of the merger of the two trusts is the introduction of a dividend target of 4% a year, based on the net asset value at the end of the preceding financial year. Some of this, however, will be paid from capital, as opposed to naturally being generated by targeting dividend-paying companies.
The board says it has “consulted with shareholders representing material interests in both the income shares and the growth Shares and they have indicated their support for these proposals.” The consolidation is expected to take effect towards the end of 2021 or early 2022.
On the back of the proposed changes to its policy, interactive investor’s analyst team believe it is prudent, and in line with our methodology, to place the trust under formal review until the shareholder vote takes place.
If shareholders approve the changes, the fund will be removed from the Super 60.
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