JPMAM set to nab the only portfolio of investment trust veteran Alasdair McKinnon
By Jessica Tasman-Jones, Portfolio Adviser, 20 Oct 21
The proposed end to the £590.7m Scottish Investment Trust has been called a “sad day” for nostalgists as the board calls for the merger of one of the UK’s oldest investment companies with JP Morgan Global Growth & Income, another stalwart in the sector…
‘A sad day for some investment trust nostalgists’
“This might be a sad day for some investment trust nostalgists but for others it demonstrates the Darwinian power of the investment trust structure,” said Killik head of managed portfolio services Mick Gilligan.
Both the Scottish Investment Trust and the JP Morgan Global Growth & Income were founded in 1887…
How the board expects shareholders to benefit from the switch
Performance in the Scottish Investment Trust had taken a hit due to its value and UK bias, said Gilligan.
The style-agnostic approach of the JP Morgan team was praised by the investment trust’s board in the RNS explaining its rationale for merging the portfolios.
“One big risk with the announced change is if we see a strong resurgence in value and gold mining stocks,” said Gilligan. “However, the new managers have scope to take advantage of such a rotation. This would be a strong test of the new management’s credentials.”
He said in the open-ended world, an Oeic facing similar issues “could quite easily limp on for years”…
Together, the two portfolios would also benefit from economies of scale, something Numis approved of in an analyst note published on Wednesday morning…
One of the last self-managed investment trusts
QuotedData head of investment companies James Carthew noted the deal removes one of the last few remaining self-managed trusts from the sector.
“These used to be more common, but over time boards realised that external managers were often better-resourced and there were less headaches (including rows over pay) if they did not have employees.”
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