A UK listed investment trust will abandon its spot on the NZX due to flagging demand, according to the latest FNZC Investment Trust Newsline.
The FNZC newsletter, published every Friday afternoon, says the European Investment Trust – managed by Edinburgh Partners since 2010 – will formally exit the NZX by early November.
“The Company’s shares have been listed on the NZSX since April 2000,” the FNZC report says. “There is a small and decreasing number of shareholders remaining on the New Zealand register as well as a reduced number of trades being undertaken on the NZSX.”
Costs of remaining on the NZX “outweigh the benefits” to the European Investment Trust shareholders, the FNZC newsletter reported.
The newsletter, produced by FNZC UK investment trust specialist, Peter Irwin, says the NZX approved the cancellation of the European fund shares “subject to satisfaction of certain conditions”.
“The Company expects to satisfy all of those conditions,” the report says. “The last day of trading of the Company’s shares on NZSX is expected to be 31 October 2017. It is expected that the shares will cease to be listed on the NZSX at the close of business (New Zealand time) on 2 November 2017.”
Despite the scheduled exit of the European trust from the NZX, a wide range of UK listed fund vehicles maintain a presence on the local exchange.
In 2015 Irwin told Investment News NZ there was “always a market for UK listed investment trusts – particularly in specialised areas”.
He said while 2008 was a peak year for the UK/NZ dual-listed vehicles, investor demand was still solid despite increasing competition from exchange-traded funds (ETFs).
Unlike index-tracking ETFs, however, which add units as per demand, listed investment trusts have a fixed number of shares and typically trade at a discount or premium to net asset value.