New Faces Don't Solve Old Problems
Changing managers often fails to boost a trust's performance, says Max King. When a trust is underperforming, a change in management may not be the solution.
The Baillie Gifford Shin Nippon (LSE: BGS) trust has had a miserable performance over the past five years, with shares trading at a 10% discount to net asset value (NAV). Despite buying back 20% of the share capital, the directors have acknowledged the need for an immediate turnaround in performance.
They will explore "all available options" if poor performance continues.
This may include a tender for 15% of the share capital at a 2% discount in 2027, as well as a possible change of manager and strategy.
Author's Summary
Changing managers may not improve investment trust performance, strategy matters too.