Abrdn trust rebrands due to 'aversion' to fund-of-funds

Abrdn trust rebrands due to 'aversion' to fund-of-funds

The Aberdeen Emerging Markets Investment Company trust shareholders have approved its rebrand  as the fund's investment policy changes due to the "current aversion" to fund-of-funds structures.

The trust will now be called the Abrdn China Investment Company.

Effective this week, it will also shift away from investing in emerging markets on a fund-of-funds basis to investing directly in the equities of Chinese companies.

The £328m trust will also be merged with the £64m Aberdeen New Thai Investment Trust in a bid to improve liquidity.

In a statement, the board of Aberdeen Emerging Markets said: "Whilst the [trust's] investment performance has been very commendable over a long period of time, in the well-populated emerging markets investment funds sector, the attractiveness of the shares has been adversely affected by the current aversion to fund of fund structures and consequent look-through costs, particularly amongst wealth managers.

"This has resulted in an overly concentrated share register with limited free float, presently calculated at approximately 16 per cent."

"One consequence of this has been the board’s inability to undertake a determined buy back campaign to address the discount to net asset value at which the shares have traded in the stock market."

The trust is currently trading at a discount of 11 per cent, which compares to a discount of nearly 9 per cent for its sector, the AIC Global Emerging Markets.

Over the past three years the trust has been among the top performers in its sector, returning 59 per cent compared to a sector average of 30 per cent.

The change of name was approved by the company's shareholders at the general meeting earlier this week and the firm received the certificate of change yesterday (October 27). 

In line with the change in name, the company's ticker will change to ACIC, effective from today.

Explaining the focus on China, the trust's board said there were relatively few listed closed-ended fund offerings in the UK specialising in investment into companies based, or with substantial operations, in China.

The firm first announced its name change in April, as part of a move to refocus the business following the sale of the Standard Life brand.

SLA sold the Standard Life name to FTSE 100 insurance firm Phoenix Group in February as the firms extended their strategic partnership.

The new Abrdn brand came as the firm re-focused its business on three strands: global asset management, technology platforms for UK financial advisers and their customers, and UK savings and wealth.

Meanwhile, last month, Abrdn launched the Responsible Global Asset Strategies fund, which will take an absolute return approach while investing in assets which promote environmental, social and governance standards.

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