Interactive Investor

Merger of trusts should be wake-up call for funds too, says interactive investor

21st October 2021 11:07

Jemma Jackson from interactive investor

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The proposed merger of two trusts is also an example of the importance of using your vote.

Yesterday’s announcement that the board of the Scottish Investment Trust (LSE:SCIN), the self-managed company that was established in 1887, proposes to merge with JPMorgan Global Growth & Income (LSE:JGGI) should act as a wake-up call for the wider industry, says interactive investor.

Kyle Caldwell, Collectives Specialist at interactive investor, the UK’s second largest DIY investment platform, says: “The investment trust industry has faced criticism from various commentators and analysts over the years for having too many small, sub-standard trusts. It’s a fair charge, but one which should be levelled at funds, too.

“While investment trust boards are becoming increasingly proactive, whether by replacing an underperforming fund manager or fund management group, changing the trust’s strategy to broaden its appeal, or winding up the trust altogether – we see little evidence of this happening in the funds industry. So Scottish Investment Trust should be a wake-up call to the wider sector – if you can’t compete, it’s time for a fresh approach.

“When it comes to merging or winding up an investment trust, boards are voting themselves out of a job, which leads to potential reluctance. Interestingly, in the case of Scottish Investment Trust, it was announced that its board will keep their positions in the enlarged JP Morgan Global Growth & Income.”

Power of voting

Moira O’Neill, Head of Personal Finance, interactive investor, says: “Scottish Investment Trust might not have blown everyone away in performance terms, but it has been serving private shareholders for generations and many will be sad to see it go. But it is important to remember that its future is in shareholders’ hands – not all votes will inspire voters to turn out. But this is one that really counts.”

Voting on interactive investor

Customers who have signed up to vote will see a Voting Mailbox in their online account.

Here they will receive notifications for all the UK-listed companies they own shares in. Where available, they’ll see links to view an event or place a vote.

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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