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Investment trust sector shrinks in frantic game of musical chairs

Mega numbers hit double digits as the sector tries to combat hefty discounts
Investment trust sector shrinks in frantic game of musical chairsPublished on September 12, 2024
  • Trust mergers hit new record as investors look for size and liquidity
  • Some small illiquid trusts face wind-down 

Arecord  number of investment trusts are merging or winding down, as the sector grapples with persistent discounts to net asset value (NAV) and investors prioritising bigger and more liquid trusts.

A merger proposal between Aurora (ARR) and Artemis Alpha (ATS) earlier this month brought this year’s count to 10 so far, seven of which have already been completed. This is markedly up from four last year and five each in 2021 and 2022, and an absolute record according to the Association of Investment Companies. On top of that, the Baillie Gifford-run Keystone Positive Change (KPC) said this week it was considering rolling the portfolio over into its open-ended fund equivalent.

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