New Faces Don't Solve Old Problems
Changing managers often fails to boost a trust's performance, says Max King. When a trust's performance is miserable, a change in management may not be the solution.
For example, the Baillie Gifford Shin Nippon trust has had poor performance for five years, with shares trading at a 10% discount to net asset value (NAV), despite 20% of the share capital being bought back.
The directors have acknowledged the need for an immediate turnaround in performance and stated that if poor performance continues, they will explore "all available options".
This has led to speculation about possible changes, including a tender for 15% of the share capital at a 2% discount in 2027, and potentially a change of manager and strategy.
Author's summary: Strategy matters in investment trusts.