The Lemon Fool

I see that Aberdeen's UK Tracker Trust is to merge with BlackRock Income Strategies Trust (the old British Assets Trust) after BIST's fairly disastrous experience with BlackRock, and the decision to seek a fresh manager.

Not good news for AUKT's shareholders (I am one), I would have thought.

MDW1954

One might naïvely suppose it was good news for Aberdeen shares, to be taking on someone else's assets. Yet ADN is down again today. What gives?

Looks like very bad practice here.

The Aberdeen UK Tracker Trust (AUKT) board should act in the interest of the AUKT shareholders, not Aberdeen Asset managers.
The new vehicle has little relation to the AUKT, but only 40% is being allowed to be extracted in cash and that at a discount to NAV.

Instead they should do the honest thing – wind up AUKT, distribute ALL the cash to shareholders, and then if they wish try to attract the released cash into Aberdeen’s new offering.
After all, as a straight all share tracker, the assets are easily realisable.

Another poor move by the lamentable board of BIST. A solid equity-based (or equity/bond mix) fund would be preferable to yet another experimental portfolio. Considering that this was marketed as a low-risk, capital preservation trust for income-seeking retirees, it has been nothing short of a disaster, failing to preserve either capital or income, and I see there will be no substantial discount-control mechanism going forward either. As for AUKT, why would a holder of a tracker want to participate in this new venture? They would have been better winding both up.

Some clarification from the Chairman of Aberdeen UK Tracker Trust, Kevin Ingram.

'The Board believes that the revised investment objective and policy of ADIGT, following FCA and required Company and BIST Shareholder approvals, should be attractive for Shareholders as a whole. The focus of ADIGT will be on delivering greater capital stability over the medium term than a long-only equity strategy (like that of AUKT) and with volatility significantly less than that of equities, Ah stuff it, whom I'm trying to kid.....we're putting the management fee up from 0.29% to 0.5%, deal with it.'