Your vote counts: the investment trust AGMs in June 2023

Kepler Trust Intelligence highlights three investment trust AGMs of note.

Although they are frequently the largest combined shareholders in closed-ended funds, private investors rarely attend or vote at annual general meetings (AGMs).  

This means missing out on getting first-hand knowledge of what the people managing your money are doing and the ability to ask them questions. Moreover, on occasions where resolutions are put forward that you may not agree with, you won’t make your voice heard by voting against them.

• Invest with ii: Buy Investment Trusts | Top UK Shares | Open a Trading Account

And as we approach the end of May, another month of AGMs looms ahead in the investment trust sector. For investors who are thinking of attending one, here are three investment trusts worth keeping an eye on.

Middlefield Canadian Income

This is one of the only closed-ended funds providing investors with country-specific access to the Canadian stock market, with the goal of providing dividends to shareholders.

Managers Dean Orrico and Rob Lauzon have positioned Middlefield Canadian Income (LSE:MCT) to take advantage of Canada’s massive population growth, with overweight positions in residential and commercial property, as well as the country’s nascent LNG industry.

At the trust’s AGM next month, the main resolution to keep an eye on is approval of the dividend policy. MCT has maintained an annual dividend of 5.1p per share since 2017, which it pays over the four quarters in equal amounts.

• Investment trust boards: what do they do, and do they add value?
• Investment trust suspends trading on valuation uncertainty

Vietnam Enterprise Investments

This is another country-specific fund that is managed by Dragon Capital, the first asset management group to be set up in the country.

Perhaps the most noteworthy resolution at Vietnam Enterprise (LSE:VEIL)’s AGM next month will be on share buybacks to manage the discount.

Although VEIL still has a strong long-term track record, the past 18 months have been tough for emerging markets such as Vietnam, in part because of a strengthening dollar and fears as to how they will fare if there is a global economic downturn.

BlackRock Smaller Companies

It is a similar story with BlackRock Smaller Companies (LSE:BRSC),which invests in UK small-caps. The trust was trading close to its net asset value (NAV) at the start of 2022, but its shares are now trading at around the widest levels we’ve seen over the past decade, despite positive signs in earnings and from the level of M&A we’re seeing in the wider UK small and mid-cap space.

Two resolutions stick out when looking at the announcement for the trust’s AGM next month. One is on an increase to maximum fees payable to the trust’s board of directors, from £200,000 to £250,000. The other is on approving the trust’s buyback mechanism, which it uses to manage its discount.