Shareholders fight plans to switch Scots fund from tracker to ‘active’

sHAREHOLDERS have thrown down a gauntlet to the Edinburgh-based managers of an investment trust after its board announced plans to change the fund’s strategy.

Shareholders society ShareSoc yesterday urged the owners of the Edinburgh US Tracker Trust to vote against the directors’ proposal to change the company from a tracker fund to an actively-managed fund.

The fund, managed by Aberdeen Asset Management, laid out plans in March to change its investment style. The board said in a statement that the change from passive management to that of an active stock picker would provide investors with “above-average dividend income and long-term capital growth”.

But ShareSoc claimed that the managers were more concerned with raising the annual fees it charged investors to manage the fund.

Roger Lawson, the chairman of ShareSoc, said in a statement that there was “no apparent benefit” to the changes for investors.

He added: “The benefit of this proposal to the fund managers is obvious: they would continue to manage the fund, but annual fees would increase fourfold.”

The statement also detailed the strengths of the existing tracker fund, arguing that its low discount showed the fund had strong investor demand.

It added that “strong evidence shows that actively-managed funds will on average significantly under-perform the equivalent tracker funds over the medium and long term”.

Shareholders will vote on the proposals at the trust’s AGM on 29 May.