Mark Barnett passes Keystone to 'rising star'

Since 2014, Mr Goldstone has also run the UK portion of Invesco Pan European Equity Income Fund (LU0267986122) and a unit-linked UK equity pension fund, which Keystone's board says "has produced outstanding results over that period."

Mr Goldstone has worked in the Invesco Perpetual UK equities team since August 2012, before which he was co-head of pan-European sales at Banco Espirito Santo in London.

Keystone's board says that Mr Goldstone will bring his own portfolio construction style to Keystone, which should give the trust "a distinctive position within the investment trust universe and sustain its longstanding attractiveness to discerning investors".

Kieran Drake, analyst at broker Winterflood, points out that the overlap in holdings between Keystone and Perpetual Income and Growth Investment Trust (PLI), which Mr Barnett also runs, had a 90 per cent commonality as at 30 November 2016. He adds: "The appointment of James Goldstone means that Keystone should be able to differentiate itself more within Invesco's closed-end fund stable."Beatrice Hollond, chairman of Keystone, also says: "Over the past few years Mark's responsibilities have grown significantly and the board believes that the time is now right for him to pass the baton to one of the rising stars of his team."After Neil Woodford left Invesco Perpetual in 2014 the number of funds and amount of money Mr Barnett was running increased, and there were concerns about whether he had too much. He took on the Invesco Perpetual Income (GB00BJ04HX60) and High Income (GB00BJ04HQ93) funds, and Edinburgh Investment Trust (EDIN) from Neil Woodford, on top of managing Perpetual Income and Growth, Invesco Perpetual UK Strategic Income Fund (GB00BJ04KZ97), Keystone Investment Trust and the UK equity portfolio of Invesco Perpetual Select Trust. But even with the handovers Mr Barnett will still manage about £22bn.

Keystone Investment Trust has also not performed well recently, substantially underperforming the FTSE All-Share over the 2016 calendar year, resulting in cumulative underperformance of this index over one and three years, although its longer-term record is good. It trades at a discount to net asset value (NAV) of about 11 per cent - its discount widened over the course of 2016 from about 4 per cent to 10 per cent, and has moved further out this year.

Edinburgh Investment Trust, Perpetual Income and Growth and Mr Barnett's open-ended funds have also underperformed this index over one year.

But this is in part due to the market shift towards value stocks, and because Mr Barnett's funds are underweight oil and gas, and have little exposure to mining shares.

And Peter Hewitt, manager of fund of investment trusts F&C Managed Portfolio (FMPG), which has holdings in Edinburgh and Perpetual Income and Growth, thinks the amount of money Mr Barnett is running isn't likely to have made a difference to performance. He points out that his performance since taking over from Neil Woodford in early 2014 has been good - and that in 2016 he did not do so well because of his investment style and allocation.

Mr Hewitt adds that Mr Barnett is focused on investing - he doesn't get very involved with other areas like some managers, for example, marketing - so should have the time to run this large amount of money.

Invesco says the appointment of Mr Goldstone to Keystone "is about developing and nurturing talent within the Invesco Perpetual investment team. James is one of the rising stars and Mark is keen to give him investment responsibilities that reflect his expertise and experience."

The management fee Keystone pays to Invesco Perpetual, meanwhile, is falling from 0.6 per cent of the trust's market capitalisation to 0.45 per cent. However, the trust is retaining its performance fee, which is triggered if Keystone's NAV total return exceeds that of the FTSE All-Share index by more than 1.25 per cent a year over a rolling three-year period, with 15 per cent being awarded on any excess performance.

Keystone currently has an ongoing charge of 0.72 per cent, or 0.69 per cent without the performance fee.

Source: Morningstar as at 17 March 2017

* Performance is that of an older share class than that indicated in the text