There is a part of me (fueled by nostalgia) that likes the way some mutual funds cling to their glorious past with names that in some cases haven’t changed in over 150 years.
There’s another, more pragmatic part of me that says it’s time for change: for these trusts (and their boards) to get real, modernize and move with the times.
Although nostalgia rules my heart and pragmatism my head, I value your opinion. What should lead the way: nostalgia or pragmatism? To gauge feedback, can I ask you to do a little exercise?
If you have a spare minute in the next few days, visit the Association of Investment Companies website (theaic.org.uk) and search for investment trusts that have global investment mandates.
The list will contain appropriately named funds, such as Martin Currie Global Portfolio and AVI Global. However, it will also include a host of names that will leave all but the true trust aficionados wondering if their search has gone wrong.
Modern era: some UK investment trust boards are adapting to the times
Monks? Bruner? Bankers? Are investment trusts really designed to make money for shareholders by investing in stock markets around the world? The answer is yes. Although the three funds are managed respectively by the investment houses Baillie Gifford, Allianz and Janus Henderson, their labels are from times gone by.
Monks was the third in a series of investment trusts launched almost 100 years ago by merchant bank JC im Thurn & Sons from offices in Austin Friars, a part of the City of London named after a medieval convent (the other two trusts were Friars and Abbots). Although Baillie Gifford took over the trust in 1931, she remained with Monks.
Brunner was founded by the Brunner family in 1927 after the sale of their chemical company Brunner, Mond & Co. The trust now has an impressive 51 years of dividend growth under its belt.
Meanwhile, Bankers was created 135 years ago and was originally overseen by seven… (yes, you guessed it) bankers. Its record of earnings growth is even more spectacular than Brunner’s: 56 consecutive years of annual dividend increases.
Everything very good and elegant. But should these trusts now be renamed to give outsiders a better idea of what they are about? Should they be rebranded as Baillie Gifford Global Growth, Allianz Global Growth & Income and Janus Henderson Global Growth & Income?
In the United States, the Securities and Exchange Commission (the country’s investment regulator) has just required investment funds to ensure that the portfolios they manage are consistent with their names.
Therefore, if a US mutual fund uses “artificial intelligence” in its title, it must have at least 80 percent of its assets in AI-related stocks. Although the regulator here (the Financial Conduct Authority) has launched plans to improve the labeling of ethical or ESG (Environmental, Social and Governance) funds, the trusts’ historic names are not on its radar.
However, some UK investment trust boards are adapting to the times. Earlier this year, the Securities Trust of Scotland board decided the fund’s name needed a 21st-century reboot. It has now been rebranded as STS Global Income & Growth, reflecting its global investment mandate and emphasis on a combination of income return and growth.
Should more trusts follow suit? Apart from the three suggestions above, should Scottish Mortgage – the country’s largest investment trust – be called Baillie Gifford World Enterprise in recognition of its focus on start-ups?
And should the City of London become Janus Henderson UK Equity Income Growth, considering its emphasis on increasing its dividend? Or is the name of a trust irrelevant and what really matters is that the trustees respect the investment objectives that underpin the fund and maximize returns for shareholders? I can’t wait to hear from you.
The old post office has never been more vital
Town center: Barry and Mary Ford for safeguarding the future of the world’s oldest post office in Sanquhar
Congratulations to Barry and Mary Ford for safeguarding the future of the world’s oldest post office in Sanquhar, Dumfries and Galloway.
It has been open since 1712 and has only had 16 operators in its time.
The Fords have taken over from Nazra Alam who, following the death of her husband, Dr Manzoor Alam (a postal historian), has returned to live with her family in the Midlands.
Post offices are integral to the health of our high streets, especially in light of the demise of bank branches.
I wish the Fords, pictured, much success and will pay them a visit shortly.
Postmasters, many of them severely mistreated by their former bosses, do an excellent job preserving the main streets of cities and towns across the country.
If your postmaster is a local hero, let me know.
I will come to greet you.
The speed goes down, but the cost of car coverage?
Slow down: 20mph lower speed limit unlikely to help reduce insurance costs
A couple of readers have been in touch regarding the new 20mph speed limit just introduced by the Welsh Government on roads in built-up areas. Michael Hine, from Pembrokeshire, and Russell Gowen, from Flintshire, are both in their 70s and their car insurance premiums have soared in recent months.
However, after Mark Drakeford, the Labor First Minister of Wales, claimed that the new speed limit will reduce collisions by 40 per cent a year, they are now asking a very pertinent question: “Will insurers reflect this in their insurance calculations?” premiums from the middle of last month? When was it introduced? Unfortunately, Michael and Russell, the answer is no.
There is a better chance that pigs will fly than that insurers will do anything to alleviate the pain caused to policyholders by skyrocketing premiums.
island dream
Recent visitors to Malta have wanted to ask me if I have set up a side business in the capital, Valletta. The business in question is Jeff’s Pastizzeria, which serves tasty pastizzi, the island’s traditional savory pastries.
‘Is this your secret money laundering company?’ asks the latest reader to visit the restaurant: long-time (and eagle-eyed) reader John Allison, from Musselburgh, East Lothian. He stumbled upon the restaurant while he was on vacation this month with his wife Kathleen.
A lucrative sideline?: Recent visitors to Malta have wanted to ask me if I’ve set up a side business in the capital, Valletta.
The answer, John, is no (the day job keeps me completely busy). But it did bring back happy memories of my last visit to the island when I took part in the Malta International Challenge Marathon – three races totaling 26.2 miles in three days.
After completing the event in a rather miserable time, I celebrated by scoffing a couple of pastizzi, stuffed with ricotta cheese and washed down with a fabulous Girgentina white wine. But not at Jeff’s Pastizzeria.
Is confidence returning?
Do you feel a little more confident about your finances than you did earlier this month?
I ask this in light of the (unexpected) fall in inflation (from 6.8 to 6.7 percent) and the Bank of England’s decision just over a week ago to keep interest rates at 5.25 percent.
That’s what I wish.
Although we are far from out of the woods, let’s hope the UK economy stays clear of the waters of recession and that Chancellor Jeremy Hunt starts thinking about removing layers of the fiscal yoke he has put around our necks.
We can’t continue like this.
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