Legal & General is merging its underperforming UK Active Opportunities Trust into its UK Special Situations Trust and has also put two other UK equity funds together.
The £156.6m UK Active Opportunities will be merged into the £30.7m UK Special Situations Trust. Both funds are run by UK equity manager Richard Penny.
Active Opportunities is in the bottom quartile of the IMA UK All Companies sector in five-, three- and one-year periods, according to FE Analytics. Special Situations has performed slightly more strongly with a third quartile return in five years and second quartile return in three.
A spokesperson said: “The UK Special Situations Trust will become larger as a result of the merger and we believe that its slightly broader investment parameters will provide greater investment opportunities in the long term than the UK Active Opportunities trust.”
The asset manager is also merging the £193.3m UK Equity Trust with the £368.9m UK Equity Income fund. Both funds are run by Richard Black.
The spokesperson said the merger “offers the opportunity for better long-term performance in a fund with a similar risk profile”.
The moves are subject to approval by unitholders at an emergency general meeting on October 31 and will take effect from November 14.
