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JPMorgan Global Growth and Income and Scottish Investment complete merger despite delays

01 September 2022

The two investment companies, both launched in 1887, have combined into a single portfolio worth more than £1.3bn.

By Tom Aylott,

Reporter, Trustnet

The JPMorgan Global Growth and Income and Scottish Investment trusts have merged in one of the largest combinations of two independent investment companies to date.

Both portfolios will combine into the JPMorgan Global Growth and Income trust, which will have assets under management (AUM) exceeding £1.3bn.

It was due to complete in March this year but the board of the Scottish Investment trust delayed this due to debt workstreams progressing at a slower pace than anticipated.

When the merger was announced back in October last year, Mick Gilligan, head of managed portfolio services at Killik & Co, said that it was a “sad day” for income-seeking investors as “another dividend hero bites the dust”.

Simon Elliott, research analyst at Winterflood Securities Limited, on the other hand, said that the two trusts were “highly suitable partners” and the combination of the two was a “positive development for shareholders in both Scottish Investment Trust and JPMorgan Global Growth & Income”.

The portfolios are among the oldest investment companies on the market, having both launched in 1887, and the inflated AUM could solidify the JP Morgan trust’s place in the FTSE 250 index.

Tristan Hillgarth, chairman of the JPMorgan Global Growth & Income trust, said: “Today’s news represents an exciting milestone for both groups of shareholders, who should benefit from the greater scale, enhanced liquidity and competitive fees of the trust.”

The £740m Global Growth and Income trust is up 286.9% over the past decade, beating its peer group by 111.3 percentage points and making it the top performing fund in the IT Global Equity Income sector over the past three to 10 years.

Total return of trust vs sector over the past 10 years

Source: FE Analytics

However, the £592m Scottish Investment trust was up a more modest 156.3% over the same period and its total return was 7.7 percentage points lower than the IT Global sector average.

That being said, the portfolio was one of the few trusts to make a positive return in the volatile markets of 2022, up 10.8% since the start of the year.

In fact, it was the best performing trust in the IT Global sector over the past year, so it’s resilience through this market downturn could help offset JPM Global Growth and Income’s 4% decline this year.

Total return of trusts in 2022

Source: FE Analytics

This is in part due to its value bias, which has lagged growth peers over the past decade but has come good in 2022.

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Data provided by FE fundinfo. Care has been taken to ensure that the information is correct, but FE fundinfo neither warrants, represents nor guarantees the contents of information, nor does it accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein. Past performance does not predict future performance, it should not be the main or sole reason for making an investment decision. The value of investments and any income from them can fall as well as rise.