Last checked at 27 Jul 2021 07:00
London, UK, 27 July 2021
Edison issues review on The Merchants Trust (MRCH)
The Merchants Trust (MRCH) is managed by Simon Gergel who is chief investment officer, UK equities, at Allianz Global Investors. He stresses that being a value investor does not mean buying bad businesses, and the polarised UK market is enabling him to invest in high-quality companies at reasonable prices. While the manager experienced a tough period of relative performance during the coronavirus-led market sell-off in early 2020, he adhered to his long-term, high-conviction process, which was the correct strategy as shown by the meaningful performance improvement in the chart below. MRCH consistently offers an above-market dividend yield (currently 5.3%).
MRCH's shares are currently trading at a 0.7% premium to NAV, which compares to a 0.2% to 2.4% range of average discounts over the last one, three, five and 10 years. High demand for the trust's shares has meant that so far in FY22 (January year-end) an additional c 3.6m shares (c 3.0% of the base) have been issued; c 8.1m (c 7.2% of the base) were issued in FY21.
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