Edison issues flash note on Acorn Income Fund

RNS Number : 0187Z

Acorn Income Fund Ld

19 May 2021

 

London, UK, 19 May 2021

Edison issues flash note on Acorn Income Fund (AIF)

The board of Acorn Income Fund (AIF) has announced the results of its strategic review ahead of the company's five-yearly discontinuation vote in August. It is proposing to change the mandate from its present c 75% in UK smaller companies and c 25% in income-producing assets to a global equity income fund focused on sustainability and positive impact, managed by BMO Global Asset Management rather than the current partnership between Unicorn Asset Management and Premier Miton. AIF's approach of investing in well-financed, income-generating and often domestically oriented small caps had led to a period of underperformance, partly attributable to Brexit uncertainty but compounded by last year's COVID-19 induced dividend cuts. However, returns have rebounded strongly in the past year (see chart) as investors have begun to reassess the UK equity market. The board advises that shareholders who favour the move to BMO should vote against discontinuation and in favour of the proposals at the AGM and EGM in August. A circular will be published in due course.

■ The board considered the forthcoming discontinuation vote as offering a good catalyst for a reappraisal of the strategy.

■ While it has performed well over the long term (total returns of c 10% pa over 10 years), AIF remains a small fund and is trading at a c 14% discount to NAV.

■ The board sees the growing appetite for sustainable investment as offering an opportunity for the fund to attract new investors and grow its share base over time. BMO Global Asset Management (through predecessor company Friends Provident) pioneered sustainable investment for UK retail investors through its Stewardship funds.

■ The renamed BMO Global Sustainable Equity Income Fund proposes to offer a sustainable portfolio yield of c 3.5% pa (compared with AIF's currently uncovered 6.4% dividend yield) at a reduced annual management fee (65bps on net assets from 70bps on gross assets) and with no performance fee.

Click here to view the full report or here to sign up to receive research as it is published.

All reports published by Edison are available to download free of charge from its website

www.edisongroup.com

About Edison: E dison is a leading research and investor relations consultancy, connecting listed companies to the widest pool of global investors. By focusing on the volume and quality of investors reached - across institutions, family offices, wealth managers and retail investors - Edison can create and gauge intent to purchase, even in the darkest pools of capital, and then make introductions via non-deal roadshows, events or virtual meetings.

Having been the first in-market 17 years ago, Edison now has more than 100 analysts covering every economic sector. Headquartered in London, Edison also has offices in New York, Frankfurt, Amsterdam and Tel Aviv and a presence in Athens, Johannesburg and Sydney.

Edison is authorised and regulated by the Financial Conduct Authority .

Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not solicitations to buy or sell any securities.

For more information, please contact Edison:

Sarah Godfrey [phone] [e-mail]

Mel Jenner [phone] [e-mail]

Learn more at   www.edisongroup.com and connect with Edison on: 

LinkedIn  https://www.linkedin.com/company/edison-group-/

Twitter    www.twitter.com/Edison_Inv_Res  

YouTube  www.youtube.com/edisonitv

 

END

 

 

NRADKFBPKBKDCPD