Star manager unable to improve performance in a challenging period for markets.
At £26 million, the trust’s assets remain “well below” the minimum size considered investable by wealth managers and other investors, the board said. Assets have fallen further since the appointment of Merian’s Richard Buxton as fund manager in February this year.
Pointing to an uncertain economic outlook, the board said that it has come to the conclusion that “it is no longer likely to be able to grow the trust in its present form by attracting significant new investors”.
It has decided that the best option is to wind up the investment company so that cash can be returned to shareholders, who may be given an alternative option to roll their investment over into another fund. It is currently looking into rollover options.
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The board will update shareholders no later than the trust’s annual general meeting in November.
The future of the trust had been under review for some time following poor performance, with the board considering replacing Jupiter with another investment manager. Following news that Jupiter was to acquire Merian, the board kept the trust mandate with Jupiter as long as star manager Buxton was given the helm. But he was unable to improve performance on the trust in a challenging period for markets set against a backdrop of the pandemic and Brexit.
The trust recorded a -27.5% share price total return over five years compared to a 15.1% return from the AIC UK All Companies sector, -38.9% over three years versus a sector average -8.8%, and -31.1% over one year, more than double the loss from the wider peer group. It is currently trading on a 9% discount to NAV, according to AIC data.
In a stock exchange statement late last year, Jupiter UK Growth’s chairman expressed frustration at the trust’s prolonged underperformance, which he said was the result of “both unfavourable macro factors...and stock-specific issues within the portfolio”.
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