- The emerging and frontier market trust could wind up after seeing its capital base shrink
- Under the proposals investors should be offered either a cash exit or a move into another vehicle
The board of Jupiter Emerging & Frontier Income (JEFI) wants to voluntarily liquidate the investment trust on the back of viability concerns that were “only reinforced” by recent geopolitical woes.
The board of the £50.8mn trust said it was “conscious of the current size of the company, the risk of further shrinkage through redemptions and the limited opportunities against the backdrop of a deteriorating international outlook”.
Earlier this year it unveiled proposals to overhaul the trust's redemption facility by restricting the number of shares that can be redeemed, from up to 100 per cent each year to a maximum of 20 per cent once every three years, starting in June 2024. The board argued that the existing facility arrangements had significantly eaten away at the trust's capital base. But a 24 February update said such plans lacked sufficiently broad support among shareholders.
The trust had recently been under scrutiny for its exposure to Russia, which amounted to 6.3 per cent of assets ahead of the Ukrainian invasion. But direct and indirect exposure recently fell to just 0.4 per cent on the back of sales and price falls – in contrast to some affected trusts writing down the value of Russian-listed equities, Russia ETFs having their shares suspended on the London Stock Exchange and open-ended vehicles suspending trading.
As part of the proposals, the board would consider offering shareholders a full cash exit minus costs, with the option of moving the trust’s assets into another fund. Further details are still due.
