The investment trust sector may well be in for better things this year, but it's unlikely we'll see an end to the vigorous consolidation witnessed in 2023. In the past week we've seen another instance of a large, successful fund looking to gobble up a smaller peer, with proposals for the £2.1bn JPMorgan Global Growth & Income (JGGI) to absorb the £69mn JPMorgan Multi-Asset Growth & Income (MATE).
Consolidation can certainly be a good thing, with sub-scale trusts merging into more successful trusts, and the latter then gaining even more momentum. But there are drawbacks too: namely, that we can end up wiping out contrarian options in the sector and limiting the diversity of approaches on offer.
We have definitely seen some changes of tack that in the short term have proved ill fated: think Keystone Positive Change (KPC), a trust that switched from being a UK value investing vehicle to a global, Baillie Gifford-managed fund back in 2021. It has struggled in the face of market rotations since then, while UK value has fared somewhat better.