The Merchants Trust

LN: MRCH

£544.1m market cap

500p last close

MRCH’s investment objective is to provide an above-average level of income and income growth, together with long-term growth of capital through investing mainly in higher-yielding UK FTSE 100 companies. The benchmark index is the FTSE 100 index.

Investment summary

The Merchants Trust (MRCH) is managed by Simon Gergel, chief investment officer of UK equities at AllianzGI. He says the current uptick in volatility in the UK stock market is providing a lot of opportunities for active stock pickers, with a wide divergence between the valuation of shares in companies with steady growth characteristics and those whose earnings outlook is less clear. Although MRCH’s annual dividend has increased in each of the last 36 years, growth in the years following the global financial crisis has been modest. However, the manager says the refinancing of a large tranche of the trust’s high-cost debt in January 2018, coupled with higher levels of portfolio income, means the board has increased confidence in growing the dividend at a faster rate, from a starting yield of more than 5%.

Share price graph
Price performance
%
1m
3m
12m
Actual 4.0 12.4 8.0
Relative* 1.7 2.5 4.6
52-week high/low 539.0p/437.0p
*% relative to local index
Key management
Simon Fraser Chairman
Simon Gergel Fund manager

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