Shaereholders have the option to roll-over into Unicorn UK Income, an open-ended fund with the same managers and a two-thirds match of holdings, or elect to take cash close to NAV at the time of liquidation.

Better outcome than before I’d say and the market seems to agree with the shares now up some 10%. The bid price of 400p is still an 11% discount to the NAV on 27 August so my current plan is to sit tight and take the cash option in due course.

“An announcement with further details on the future of the Company will be published as soon as practicable and expected to be no later than mid-September. Thereafter, the Company expects to publish a circular in relation to the Board’s proposals for the future of the Company, including a notice convening the Extraordinary and Annual General Meetings.”

Third interim dividend has been held at 5.75p as a sop, after earlier indications it was likely to be cut, but all a bit of a shambles really. Still minded to hold until we have a better idea of the next steps as not keen on selling out on a near-20% discount with a continuation vote looming.

https://investegate.co.uk/acorn-income-fund–aif-/prn/dividend-declaration-and-update-on-future-of-the-company/20210812070000P1220/

Hi Nick, yes I suspect you could be right about some people moving over to Chelverton. It has the same ZDP structure, was also launched in 1999, but is not quite as highly geared. Perhaps more importantly, it doesn’t have the complication of the income portfolio that Acorn has. I believe its yield has been lower than Acorn in the past (as has its dividend growth in recent years) but it looks a lot more sustainable (!) given the level of revenue reserves Chelverton has.

The timing of shifting away from the UK could backfire of course but, on the other hand, many folks have been saying the UK is undervalued for a long, long time now. Year-to-date, I think the UK is up 10% vs 5% for global, so 2021 could be the first year in several where the UK comes out meaningfully ahead.

However, I guess you could also argue that we have too many UK-focused equity trusts relative to global ones and these mandate changes can help address that balance a little.

Yes, violent is a good word to describe the change here and that’s certainly irked people from the comments I’ve seen so far.

I haven’t paid a great deal of attention to manager changes in the past but we’ve seen a rash of them recently. Edinburgh and Temple Bar were more subtle shifts, broadly keeping the same style, but Witan Pacific to BGCG was a more marked change. This proposed change from Acorn and Keystone have seen the geographic focus move from UK to global plus the sustainable angle on top, so they really are complete reinventions.

At least with Acorn, shareholders get to vote on the policy change and the continuation. I suspect if shareholders do vote to wind-up then merging with another small-cap trust would then become one of the possible exit routes.

Boards not wanting to put themselves out a job is a potential risk of course, although many of them have multiple directorships and shorter terms are becoming more commonplace so I’m not sure how big a factor it is in practice. And I suspect board members that do seem to cling on too much may find it harder to get future directorships.

I’d say the make-up of my portfolio is driving a lot of my decision here. A shift to something more global is probably what I would have done anyway and having quite a lot in Fundsmith/SSON/LTG already means I’m happy to diversify a bit with a different fund management house. But this definitely in the experimental pile so I can see how it develops.

The BMO Global Sustainable fund looks really uninspiring to me – why choose anything but an exceptional fund with exceptional (and aligned) managers. It’s so rare for giant fund houses like this to have inspiring, free-thinking managers/funds.

I would be very surprised if e.g. Fundsmith or Smithson haven’t outperformed the global BMO trust over the next 5 years. Sometimes it’s better just to add to your best ideas…