Scottish Mortgage (SMT) and Baillie Gifford US Growth (USA) have registered a 120% uplift in their holdings in Zipline, the US drone delivery company that, as we reported yesterday, is in the midst of a $1bn fund raise that will more than double its valuation to $20bn from $7.6bn at its last funding round just six months ago. The company, which received a strategic investment from Uber in August, represented 3.8% of the assets in £16bn SMT at 16 September, up from 1.8% at 31 July. USA, the £1bn trust battling to stop hedge fund Saba Capital taking control of its board, said Zipline had doubled to 4% of its portfolio.
Foresight Environmental Infrastructure (FGEN) saw over 99% of shareholder votes back the company’s continuation at its annual general meeting yesterday. In a third continuation vote caused by the double-digit discount on its shares, the £553m, 9%-yielder saw over 335.7m shares, or 99.8% of the total support its continuation in its current form. This was an increase from 93.8% support last September and 92.5% in 2024. Stephanie Coxon, who was elected chair by 99.9% of votes, thanked shareholders and said the board would remain focused on capital discipline and strategic continuity.
M&G Credit Income (MGCI) has launched a share issue to institutional and retail investors to meet strong demand for the £190m, 8%-yielding debt fund. The new shares will be priced at a 1.5% premium above net asset value shortly before the offer closes on 20 October. The announcement came alongside interims showing the defensively positioned portfolio made a 2.4% total investment return in the six months to 30 June 2026, below its benchmark return of 3.8%. Over three years it has generated 31.6%.
Richard Williams, senior analyst at QuotedData, said: “MGCI’s zero-discount policy has seen the trust move between issuing and buying back shares as demand has ebbed and flowed, so it is encouraging to see it firmly back in issuance mode. The trust has already issued or sold from treasury more than 18m shares over the past year and, with this fundraising priced at a 1.5% premium to NAV, further growth should be accretive to existing shareholders while improving scale and liquidity.”
Merchants (MRCH), the £992m value-style UK equity income trust, outperformed the FTSE All-Share in the six months to 31 July. Half-year results showed the 4.5%-yielder, lead managed by Simon Gergel at Allianz Global Investors, delivered a total underlying investment return of 9.3%, beating 7.9% from its benchmark. Shareholders saw an 8.4% total return as performance recovered from the war in the Middle East and was boosted by bids for two of its larger holdings, fuel distributor DCC and food and beverage ingredients supplier Tate & Lyle, both at substantial premiums. Total income edged 1% higher to £29.1m with revenue earnings per share rising to 18p from 17.7p to cover 15p of dividends of two payments of 7.5p per share (up from 7.3p last year). Merchants is in its 45th consecutive year of dividend growth.
Richard Williams said: “A solid half for Merchants comfortably beating the FTSE All-Share benchmark, with stock selection driving the outperformance. This came despite a headwind from its sizeable exposure to mid-sized companies at a time when larger UK stocks were leading the market, with good stock selection more than compensating. Takeover bids for DCC and Tate & Lyle were particularly helpful.”
North American Income Trust (NAIT) has continued to do well since the £495m fund followed its managers from Aberdeen to Janus Henderson last year. Half-year results to 31 July show Fran Radano and Jeremiah Buckley oversaw a 17.3% total shareholder return that was just behind the Russell 1000 Value index but ahead of the 7.9% from the S&P High Yield Dividend Aristocrat Index.
Richard Williams said: “NAIT delivered a good half despite its income mandate leaving it underexposed to some of the technology stocks that drove the US market higher. Its 13.6% net asset value return therefore lagged the Russell 1000 Value index but comfortably beat the more relevant Dividend Aristocrats index. Importantly, dividend growth across the portfolio was strong enough to drive a 21.9% increase in revenue earnings, providing good cover for the increased dividend payout.”
