Taking a contrarian stance on the market can generate outsized returns, but the former Scottish Investment Trust was a prime example of the pitfalls of swimming against the stock market tide. The completion of the trust’s merger with JP Morgan Global Growth and Income this week should cement a recovery in performance.
The combination of two of the oldest investment trusts in London produces a fund, trading under the name of the acquirer, with net assets of roughly £1.3 billion and a more solid place within the FTSE 250. Added scale should bring lower third-party investment costs and greater liquidity that could entice more institutional investors, providing more support for the shares. The merger is also set to cut the continuing charge to about 0.55
