Proposed change to investment policy (7673Z)
21 Marzo 2012 - 10:18AM
UK Regulatory
TIDMEUS
RNS Number : 7673Z
Edinburgh US Tracker Trust plc
21 March 2012
21 March 2012
EDINBURGH US TRACKER TRUST PLC (THE COMPANY)
Proposed change to the Company's investment policy
The Company proposes to seek shareholder approval to amend the
Company's investment policy to provide investors with above average
dividend income and long term capital growth through active
management of a portfolio consisting predominantly of S&P 500
US equities and to make certain other associated changes. A
document setting out the Proposals in full will be sent to
shareholders shortly.
BACKGROUND
The Company currently provides index tracking performance for
the large-cap US market through full replication of S&P 500
Index constituents. However, the Company has bought back a
substantial number of its shares in recent years. The Board has
consulted a number of the Company's larger shareholders and
believes that by changing the Company's investment policy from
passive to active management, with a bias toward income, the
Company could both attract new investors and benefit existing
shareholders by having an investment mandate with relevance to
investors in the wider market for collective funds whilst
maintaining exposure to US equities.
PROPOSALS
The Board, in conjunction with Aberdeen Asset Managers Limited
("Aberdeen" or the "Manager"), is proposing the following changes
(together referred to as the "Proposals") with the aim of making
the Company a more attractive and competitive investment
proposition in the future:
-- The investment objective and investment policy will be
changed to provide investors with above average dividend income and
long term capital growth through active management of a portfolio
consisting predominantly of S&P 500 US equities.
-- A maximum of 20 per cent of total assets can be invested in
fixed income stocks and the Company will also be able to invest in
Canadian stocks and US mid and small cap stocks to provide for
diversified sources of income.
-- The Company will retain the S&P 500 Index as its benchmark index.
-- The Company will aim to provide an initial annual net
dividend yield of 3.5 per cent, payable in quarterly dividends,
other than in the first twelve months where dividends will continue
to be paid semi-annually.
-- The Company will be able to gear up to a maximum of 20 per
cent of net assets. This is likely to be achieved by using bank or
other short term borrowings rather than through structural or long
term gearing.
-- The initial portfolio is expected to comprise at least 50
holdings and no more than 10 per cent shall be invested in any one
investment.
-- The Company's name will be changed as part of the proposals.
-- Aberdeen will continue to manage the Company and the
responsibility for managing the portfolio will be with Paul
Atkinson, head of North American Equities at Aberdeen, and his
Philadelphia-based team, which is responsible for the management of
GBP2.1 billion of equities and GBP5.2 billion of fixed income in
North America(1).
-- The management fee will be 0.8 per cent of gross assets
reflecting the change from passive to active management. Management
fees and borrowing costs, if any, will be charged 70 per cent to
capital and 30 per cent to revenue.
-- The total expense ratio is not expected to exceed 1.1 per
cent of net assets and the costs of the changes are not expected to
exceed 0.3 per cent of net assets.
-- The Company will have a continuation vote in 2012 and every three years thereafter.
The Board is also seeking approval for the Company to be able to
issue new shares to satisfy secondary market demand where it does
not dilute shareholders' interests to do so.
((1)Figures as at 31 December 2011)
SHAREHOLDER APPROVAL The Proposals are designed as a package and
if the resolutions are not approved none of the changes outlined
above will be implemented and the Company will continue as an index
tracking fund.
A shareholder circular will be despatched shortly to convene a
meeting at which approval will be sought from shareholders for the
Proposals. It is expected that the meeting will take place in May
2012. The proposed changes will only be introduced after this date
and in the meantime the Company will continue to be managed under
its existing arrangements and will apply its existing buyback and
non pre-emptive allotment powers, if required.
Enquiries
William Hemmings/Gary Jones
Aberdeen Asset Management
020 7463 6000
James Moseley/Robin Archibald
Winterflood Investment Trusts
020 3100 0250
This information is provided by RNS
The company news service from the London Stock Exchange
END
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