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Establishment Trust reports annuals as voluntary liquidation looms

Establishment Investment Trust to wind up?

Establishment Trust reports annuals as voluntary liquidation looms – On 12 April 2019, Establishment Trust’s (ET) board announced it intended to put forward proposals to put the company into voluntary liquidation. This followed the announcement on 20 November 2018 that the board would not be recommending shareholders vote in favour of continuation of the trust in its current guise.

ET has this morning published its annual report, which in addition to its reporting its annual results to 31 March 2019, discusses the proposals the board is putting forward.

Results for the year

The following exert is from Blackfriars Asset Management, ET’s manager: “For the financial year to 31 March 2019 the share price fell 1.4% while the NAV declined by 7.8%. Including dividends totalling 10.3p paid during the year, the total returns of the share price and the net asset value were 3.7% and -2.9% respectively. For comparative purposes, the MSCI AC Asia ex Japan Index rose 2.4%, the MSCI AC World Index gained 10.8% and the FTSE UK Private Investor Balanced Index advanced 7.3%.  At year end, the discount stood at 9.8%.

Since launch in March 2002, the share price and NAV have compounded at 7.1% and 7.4% respectively in total return terms.  For comparative purposes, the MSCI AC Asia ex Japan Index has compounded at 9.8%, the MSCI AC World Index at 7.1% and the FTSE UK Private Investor Balanced Index at 6.3%. Dividend growth (excluding recent special dividends) has compounded at 9% since launch.

Over the life of the company, the manager has always maintained a heavy commitment to Asia ex Japan equities but has also invested in Japanese equities, gold bullion ETFs, a variety of hedge funds, a number of investment trusts and more recently has held a number of high yielding UK equities.”

The Future

The board is proposing shareholders vote for any of, or any combination of, the following options:

  1. The default option of rolling some or all of their investment into new shares at formula asset value to be issued by Henderson International Income Trust (HINT), and/or
  2. Rolling some or all of their investment into shares to be issued by VT Garraway Asian Centric Global Growth Fund; and/or
  3. Receiving cash at NAV less costs.

ET: Establishment Trust reports annuals as voluntary liquidation looms

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