The board of the £921m Perpetual Income and Growth investment trust is persevering with under-performing fund manager Mark Barnett, after he was sacked by the Edinburgh investment trust this morning.
The board of the trust had previously warned Mr Barnett that performance needed to improve.
In a statement to the stock exchange this morning it said it would not be appropriate to review the trust's investment management ahead of the general election this week.
However it pledged to continue monitoring the management and performance of the trust.
The trust has returned 0.68 per cent over the past three years, compared with 19 per cent for the average trust in the AIC UK Equity Income sector in the same time period.
As market fears about political risk in the UK have receded in recent months, the trust has performed better. It has returned 8 per cent over the past three months, compared with 6 per cent for the sector average.
Mr Barnett was this morning (December 11) removed as manager of the other UK equity trust he has been running, the Edinburgh investment trust, with poor performance cited as the reason.
In the announcement that followed swiftly from the Edinburgh news, Richard Laing, chair of Perpetual Income and Growth wrote: “While the company’s long-term performance remains poor, performance, both in absolute and relative terms, has improved over the last three months.
"In light of this, and with the general election taking place this week, the board does not consider it appropriate to undertake a review of its investment management arrangements at the current time.
"However, the board has had a number of discussions with the management at Invesco about the continuing poor performance and about processes around individual portfolio managers and will be closely monitoring the situation, particularly with regards to the outcome of the upcoming general election and the impact of this on the company’s portfolio and performance.”
Mr Barnett, who is co-head of UK equities at Invesco, has stated that his extensive investments in companies exposed to the UK domestic economy would perform better when there is greater clarity on the issue of Brexit.
But in removing him as manager of the Edinburgh investment trust, the board stated that while they understood his position on Brexit, much of the underperformance happened as a result of individual stock picking errors by Mr Barnett.
Ryan Hughes, head of active portfolios at AJ Bell, said: “If the election goes the way of the Tories tomorrow we could see the much-anticipated ‘Brexit bounce’, with UK smaller companies rebounding on a more certain UK political outlook and outcome to Brexit, meaning Barnett’s final quarter of performance could be more positive.
"Conversely, a hung parliament this week could do quite the opposite.”
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