US fund switch gains approval despite protests

Business Correspondent/Personal Finance Editor

Wednesday 30 May 2012

The UK's only investment trust tracking the US stock market has morphed into a more expensive actively-managed fund despite private shareholder disquiet.

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SIMON BAIN

Edinburgh US Tracker Trust has become North American Income Trust after the change was approved at the company's annual meeting, held yesterday at the Edinburgh offices of managers Aberdeen Asset Management with no representation from shareholders other than directors.

ShareSoc, the UK private shareholder lobby group, had protested earlier this month that changing the mandate was "against the interests of the investors".Roger Lawson, chairman of ShareSoc, commented that it was difficult to mobilise shareholders for meetings in Scotland with limited notice.He added: "They should webcast the meetings. We will continue to pursue these kinds of issues."Mr Lawson has warned that annual fees will increase fourfold to 0.8%, while total running costs will treble to around 1.1% plus much higher dealing costs. He has also claimed that the board failed to investigate "alternative fund managers with proven track records, of which there are many".Mr Lawson said yesterday: "Unfortunately investment trusts do tend to sympathise with the fund managers, particularly when directors have been there a long time. Managers tend to have a lot of influence over the directors."James Ferguson, trust chairman, told The Herald: "It has been said this was a put-up job by the manager but this was not the case." He said the board would monitor performance closely, as "that is what we are paid for".The former American Trust has been run as the market's only US tracker since it was converted to passive management in 1997 by the former Edinburgh Fund Managers.Now it will revert to an actively-managed fund, run by Aberdeen's Philadelphia-based North American equity team. Mr Ferguson has said around 60% of the share base was consulted, with a "pretty favourable" response.

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US fund switch gains approval despite protests

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