The board of the Jupiter UK Growth trust, managed by Richard Buxton, has announced plans to pull the plug on the fund.
Buxton had been at the helm of the fund since May after the board sacked manager Steve Davies in February following a prolonged performance slump.
In an RNS statement on Monday the board said after a discussion with its adviser Numis it had decided to liquidate the fund on the basis it is “no longer likely to be able to grow the trust in its present form by attracting significant new investors”.
“The board currently believes that the best option is to liquidate the company so that shareholders will have the option to receive cash or, if possible, the ability to roll over their investment into another investment vehicle,” it said.
It noted that the trust was now “materially smaller” than it was when the decision to appoint Buxton was announced in February. At that point assets in the trust stood at £48m but since then its market capitalisation has shrivelled to £26m which the board noted “falls well below the minimum size generally considered investable by wealth managers and other prospective investors”.
The board added that while the stock market had recovered some of its losses from the Covid sell-off in February and March, the economic outlook remains uncertain.
The trust had been suffering from dire performance for years prior to the coronavirus outbreak. It is the worst performer in the IT UK All Companies sector over all major timeframes, handing investors a 41.4% loss over three years, over three times worse than the sector average of -12.0%.
Under Buxton’s leadership the trust has continued to lag peers, returning -6.9% since the end of May compared with the sector which is down just -0.2%.
The board said it would be discussing whether to liquidate shareholders investments into cash or roll over their investments into another vehicle. It added shareholders would be updated “shortly” and no later than the trust’s AGM scheduled for November.
