The board of the Schroder UK MId Cap fund has announced a slew of measures to improve consistency of performance and promotion of the investment trust.
In an announcement to the London Stock Exchange this morning (26 March), the board said it is introducing a continuation vote, a fresh buyback policy and a reduction in the management fee.
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The board said that while the company’s shares will trade closer to NAV over the longer term, “the primary focus must remain on consistent, strong investment performance, combined with effective marketing and promotion of the company”.
The continuation vote is to be proposed at the AGM in 2028 and if passed, will be held every three years. The resolution requires a majority of those voting to be passed, if it is not the directors will put forward proposals for the reconstruction or winding up of the trust within six months.
The board also said it intends to buy back shares more actively in order to inhibit a wide discount to NAV from developing in the company’s shares in the future. The trust’s authority to repurchase 14.99% of its issued share capital was renewed at the AGM held on 24 February 2025.
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Finally, the board has agreed a reduction in management fees with Schroder Unit Trusts. Current fees are 0.65% per annum on net assets plus short term borrowings, less cash up to £250m, and 0.6% per annum on any amount in excess of £250m. With effect from 1 April 2025, the reduced management fee will be calculated based on the lower of 0.60% per annum of market capitalisation and the current net asset value-based fee arrangement.
Commenting on the initiatives, Harry Morley, chair of Schroder UK Mid Cap fund, said: “I have spoken widely to our shareholders and appreciate the significant support indicated both for our differentiated proposition and our closed-ended investment trust structure. We believe the strategic measures announced today will further strengthen the investment proposition of our company for the benefit of current and prospective shareholders. We remain confident in the continuing attractions of UK mid cap equities and believe that the company is well positioned to capitalise in the future growth potential of the asset class.”