UK equity investment trusts were among the biggest risers in the FTSE All Share on the morning of Christmas Eve as politicians from both the UK and the European Union signalled a deal was imminent.
The Aberforth Split Level Income trust led the index gaining 11.2% by mid morning. The £182m investment trust is benchmarked against the Numis Smaller Companies Index and has a value focus. The next highest FTSE All Share risers were Dignity and Aston Martin Lagonda, which rose 8.6% and 8% respectively.
The £246m JP Morgan UK Mid Cap and £877m Henderson Smaller Companies investment trusts had both gained 6.2% putting them among the top-10 risers on the index.
The market moves come as prime minister Boris Johnson and European Commission president Ursula von der Leyen are reportedly set to hold a news conference announcing a narrow trade deal, removing fears of a no-deal Brexit. It had initially been set for 8am before being postponed to 10am. Around midday, the BBC reported that an EU source had said it could be “a good few hours yet” before negotiations conclude.
At the start of the month both the UK and EU had suggested a no-deal was unlikely and overshadowed positive coronavirus developments, such as the UK approval of the BioNTech vaccine on 2 December.
Nevertheless, the pound was trading at $1.36 against the US dollar compared to $1.33 earlier in the week. The FTSE 100 was up 0.2%, while the FTSE 250 was up 0.6%.
Other investment trusts that performed strongly include the £2.2bn Mercantile Investment Trust, run by JP Morgan Asset Management fund managers Guy Anderson (pictured) and Anthony Lynch, and the £897m Edinburgh Investment Trust, formerly run by Mark Barnett before it was taken over by James de Uphaugh.
The Mercantile Investment Trust invests in small and medium UK companies while the Edinburgh Investment Trust invests across the market-cap spectrum with 67.8% of its portfolio currently in the FTSE 100. Both were up 3.4% by mid morning.
Several asset managers also performed strongly amid the Brexit news with M&G being second only to Lloyds as the FTSE 100 stock making the most gains by mid morning. It was up 3.6% while Legal & General was also among the top-10 large-cap risers gaining 2%. In the FTSE 250, Rathbones gained 3.2% and Liontrust rose 2.4%.
See also: Charles Younes: How are UK funds set to perform after the Brexit transition?
