The investment trust was Matthews’ sole portfolio after he was replaced on the £983m UK Alpha Plus fund, formerly managed by Richard Buxton, by Nick Kissack and Bill Casey in March.
Wise Funds this morning announced Matthews would join the firm in September to manage its Multi-Asset Income and Multi-Asset Growth portfolios.
His appointment coincides with the final UK Growth Trust annual report under Schroders management.
Considerably below expectations
The UK Growth Trust board said in its annual report that investment management performance should be measured over the long term.
“It is very disappointing to note therefore that under Schroders’ fund management, the company’s long-term investment performance is considerably below the board’s expectation and has even lagged the benchmark since its inception.”
For the year ended 30 April, the company’s net asset value rose 9.1%, above the FTSE All Share benchmark, which returned 8.2%. Over a 10-year period, the investment trust returned 93.9%, while the benchmark returned 90.9%.
Schroders UK Growth Trust performance
| 3yr | 5yr | 10yr | |
| Schroder UK Growth | 27.89 | 41.73 | 123.61 |
| FTSE All Share | 27.33 | 51.89 | 113.99 |
| IT UK All Companies sector | 27.81 | 61.16 | 137.21 |
Source: FE Analytics
“The company, despite its ongoing share buy-back policy, has also struggled with a persistent and wide share price discount to NAV,” the board said in the report.
The discount has more than halved from 13.5% to 6.5% since 14 April, when the board announced it was ditching Schroders for Baillie Gifford.
Iain McCombie and Milena Mileva (pictured) will co-manage the trust when it moves to Baillie Gifford.
The Scottish asset manager has waived £732,000 from its management fee, equivalent to approximately six months of fees. The portfolio will move to Baillie Gifford from the close of play on 29 June, pending Financial Conduct Authority (FCA) approval, or 13 July at the latest. It will be renamed Baillie Gifford UK Growth.
Baillie Gifford will realign the portfolio to invest in a bespoke, best ideas portfolio, with approximately 40 stocks.
Wise appointment
Matthews will be a co-manager on the Wise multi-asset portfolios, when he joins on 3 September. He joins Tony Yarrow and Vincent Ropers in management of the funds.
Yarrow said he has known Matthews for a decade and had great respect for his ability as an investment manager.
Ropers said: “As our group expands, bringing on board a co-manager of Philip’s calibre signals our continued commitment to delivering the best possible investment outcomes for our clients.”
