JPMorgan Russian Securities Trust faces continuation vote

In the first of a new monthly series, Kepler Trust Intelligence highlights upcoming investment trust annual general meetings. 

March 2022 promises to be a busy month, with 18 investment trusts scheduled to host their annual general meetings (AGM).

Market conditions year-to-date have been highly unpredictable with a shift in market sentiment on the back of rising inflation and expected interest rate hikes in addition to the recent outbreak of conflict between Russia and Ukraine. The table below highlights this month’s upcoming AGMs across all Association of Investment Company (AIC) sectors.

March 2022: upcoming AGMs

Source: Association of Investment Companies (AIC)

JPMorgan Russian Securities

Of notable interest is JPMorgan Russian Securities (LSE:JRS)' upcoming AGM this Friday (4 March) where a continuation vote of the trust is scheduled to be held. At the company's AGM on 7 March 2017, a resolution was passed requiring the company to put a continuation vote to shareholders every five years.

The fund managers will update shareholders on the extremely challenging market conditions for Russian holdings on the back of imposed international sanctions and significant central bank interest rate hikes. JRS’s NAV is more than 30% down in the last month at the time of writing (28 February) and the upcoming AGM certainly promises to be an interesting encounter.

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Standard Life Private Equity Trust

Many of the proposed special resolutions at upcoming AGMs are for continuation of the permission to issue and repurchase shares. However, Standard Life Private Equity (LSE:SLPE) Trust are proposing to change the name of the trust to abrdn Private Equity Trust Opportunities plc to match Standard Life Aberdeen’s rebrand to abrdn in 2021.

Henderson Opportunities Trust

A more notable proposed resolution is from Henderson Opportunities (LSE:HOT), which is looking to make changes to the investment objective and policy of the company. The board are seeking permission from shareholders to invest up to 10% of the trust’s gross assets in companies outside the UK. While the investment strategy or process would not change, HOT’s board highlight the proposed changes seek to solve issues that arise from corporate actions including spinouts from existing holdings, which can result in the trust not holding shares in overseas entities.

Assuming the proposed change is approved, the asset allocation of HOT will be between 70%-100% in equities, with the remainder held as fixed income and cash. In addition, the stock selection will not be constrained by the benchmark (FTSE All-Share index), and there will be no limits on investment by sector or market capitalisation.

Currently, HOT’s portfolio holds between 70 and 100 investments, which will change to a minimum of 60 individual holdings, with no more than 10% of gross assets held within a single company. In addition, the company will be permitted to invest up to a maximum of 10% of its gross assets in private securities that are not quoted on an exchange.

While objectively the trust will not dramatically change, the proposed resolution by the HOT’s board highlight their flexibility in adjusting the strategy during challenging market conditions and one which shareholders will be keeping a close eye on.

Neema Nabavian is an investment trust research analyst at Kepler Trust Intelligence.