Investment trust round-up: the biggest stories of the closed-ended sector in 2018
The year started off with a bang with the implementation of new PRIIPs regulation and along with it the introduction of KIDs (Key Investor Documents) on investment trusts.
Closed-ended funds were required to include this information and while most did, some 96 UK-listed vehicles did not do so immediately and as a result, were temporarily removed from a number of leading platforms including Hargreaves Lansdown.
The £3.5bn F&C Investment Trust (formerly named the Foreign & Colonial Investment Trust) turned 150 this year, and as the oldest investment trust in the UK, the sector did too.
To celebrate the feat, we spoke to current manager Paul Niven and chairman Simon Fraser about how the trust has changed over the years and how the board and manager can work together for the shareholder's best interest.
The KIDs debate only got louder as the year went on and in after several calls for them to be banned, the Association of Investment Companies (AIC) decided it would not host the information on its website.
Chief executive Ian Sayers said it would "not be responsible to do so" as the KIDs "overstate likely future performance and understate investment risk" and encourage investors to 'buy high and sell low'.
In one of the biggest stories of the summer, Invesco managers Paul Read and Paul Causer decided to resign from their roles running the £123m Invesco Perpetual Enhanced Income Trust due to a disagreement with its board.
The industry was split over who was "in the wrong" and a number of houses interviewed to take over the trust, but it ultimately decided for Invesco to remain but some of the board members to leave.
Despite a slow start to the year, fundraising picked up by Q3 (which saw a number of launches including Smithson - the biggest on record) and 2018 soon became the first year to see the highest number of IPOs since 2007.
But even more interesting was the fact most of these launches were in the traditional equity space rather than in alternatives - which have dominated new money in the closed-ended sector for several years.
Mobius was not the only veteran manager to launch a trust this year. Well-known Terry Smith launched the Smithson Trust this year which also went on to be the largest ever UK trust IPO on record, raising a huge £822m, despite only targeting £250m.
The trust will be managed by Simon Barnard and Will Morgan while CIO Smith will provide advice and support.
After an extremely busy year, AIC CEO Ian Sayers spoke to Investment Week and looked back on the last 12 months. Unsurprisingly, his biggest bugbear was the KIDs news though it was also a high point as it showed the coming together of the industry.
Next year, the trade body's priorities include continuing to address KIDs, recategorising its sectors and spreading the word on investment trusts with a particular focus on education for younger generations.
It has been a busy year for the closed-ended sector having celebrated its 150th anniversary and seeing the largest number of IPOs in over a decade. Check out our gallery showcasing the biggest investment trust stories of 2018.
Jayna is senior reporter and investment trust correspondent at Investment Week. She joined the publication in August 2015 after graduating with an MA in Multimedia Journalism from the University of Kent.
Jayna holds the NCTJ diploma and has experience in print, online and broadcast journalism. She is responsible for the Investment Week monthly podcast.