The Scottish Investment Trust will begin management after 134 years of trading after the review concludes that its unprofitable portfolio needs to be integrated with rival JPMorgan Global Growth & Income to create a £ 1.2 billion fund.
The trust has significantly outperformed its global-focused peers in the last decade, both in terms of share price and total return. The board said the merger with JGGI would be in the best interests of investors.
Edinburgh-based Scotland has maintained an impressive record of 37 consecutive years of dividend growth, but its prejudice against unfavorable “value” stocks and its great commitment to gold miners favored its capital growth. did not.
The Scottish Investment Trust was founded in 1887 but will merge with JGGI after poor performance.
SCIN recorded stock returns of 8.7%, 1.7%, 19.3% and 124% over the 1st, 3rd, 5th and 10th years, respectively. Data from the Association of Investment Company shows.
This is compared to the averages of 29 percent, 101.5 percent, 149.9 percent and 418.6 percent of peers over the same period.
SCIN, along with a contrarian portfolio management team led by Alasdair McKinnon, aimed to generate long-term growth by investing in undervalued international companies.
The portfolio was redesigned in February to take advantage of this view, as the market believes it significantly underestimates the strength of post-pandemic recovery and its ability to support circular and value equities.
However, outperformance was not achieved. SCIN is currently receiving a £ 863.2 million discount of 12.8% on NAV.
SCIN’s Top Holdings at the end of September
Lead manager McKinnon has voiced support for the role that gold, or stocks of gold mining companies, can play in portfolios to hedge inflation.
At the end of September, SCIN counted Barrick Gold and Australian gold miner New Crest Mining in five major positions.
The former has fallen 21.1% since the beginning of 2021 and the latter has been flat over the same period, but inflation appears to be rising globally.
Trust’s board of directors was particularly impressed with the investment strategy JP Morgan Asset Management develops for the benefit of JGGI on Wednesday after receiving a “many proposals” for a review of SCIN’s investment management arrangements. “.
JGGI hosts a diversified portfolio of approximately 50-90 shares, and investment managers are highly confident.
In one, three, five and ten years, it has beaten its peers in global equity earnings investment trusts in terms of both stock prices and NAV returns.
Founded in 1887, JGGI was originally known as the British Steamship Investment Trust Company and was renamed Fleming Overseas in 1982, until United British Securities refocused from UK equities to global equities. Also known as.
JPMorgan Chase acquired Fleming in 2000 and the Trust was renamed JPMorgan Overseas. In 2016, it became JP Morgan Global Growth & Income.
SCIN shareholders will own shares in JGGI upon completion of the transaction.
The board of directors said: ‘JGGI and SCIN were both founded in 1887, and the merger of the two companies combines their proud history.
Betting on gold miners like Barrick Gold was not fruitful for SCIN
JGGI added that it will provide shareholders with strong investment performance through a “style-agnostic” approach, abundant resources, attractive dividends, scale and low renewal rates.
Commenting on Killik & Co Mick Gilligan’s Head of Decision Making for Managed Portfolio Services: Faced with similar problems in the open-ended world, OEIC can be very easily dragged over the years.
Shareholders are agnostic to the style of paying a portion of the dividend from capital and resetting the yield to 4% from a value-biased trust with gradual dividend commitment and current 3.5% yield (value and growth). Read Blend) Move to the vehicle. NAV on June 30th every year.
Poor performance in recent years meant the end of SCIN 134 years later
He warned that the “big risk” for investors could be “a strong resurgence of value and gold mining stocks,” but the new manager said “there is room to take advantage of such rotations.” ..
JGGI Chairman Nigel Wightman said: ‘The board expects the expanded company to have widespread appeal among investors and will eventually be large enough to enter the FTSE250.
“The company will continue to benefit from the strength and depth of JP Morgan’s management team and the investment strategies and processes that have had strong results for shareholders.”
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The 134-year history of the “Hero of Dividends” Scottish Investment Trusts Ends
Source link The 134-year history of the “Hero of Dividends” Scottish Investment Trusts Ends