At two extraordinary general meetings yesterday (26 October), Growth and Income and Merian UK Equity Income shareholders 95.8% and 93.1% voting in favour, respectively.
According to Jupiter, this merger is part of a “broader rationalisation of our product range to provide a more focused offering for clients”.
The Jupiter Growth and Income fund has seen over £6m in outflows over the last three years, while the Merian UK Equity Income fund has seen £5.4m withdrawn since October 2020, according to data from Morningstar Direct. However, the Jupiter Responsible Income fund has lost £15.1m over the last three years.
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In a letter to shareholders, Jupiter justified the merger by noting that the funds all primarily invest in UK equities, while maintaining equivalent risk levels.
Furthermore, it cited that by bringing the funds under the Responsible Income umbrella, it will allow for an opportunity to invest in a fund which incorporates a responsible investment approach as part of its investment strategy.
The merger will also result in lower fees, with the I-class fixed annual charge reducing from 0.99% on the Growth and Income fund and 0.9% on the Merian UK Equity Income fund to 0.81% in the end product. All legal, operational or administrative costs will be paid by Jupiter.
“Therefore, the manager believes that it is in the best interests of unitholders in the merging trust to merge into the receiving trust,” Jupiter said.
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The asset manager noted that the Responsible Income fund had a significant weighting towards large cap stocks, with 56.8% of the portfolio in large cap compared to 36.7% for Growth and Income and 32.4% for Merian UK Equity Income.
Jupiter said that about 75% of each of the funds will need to be realigned following the merger, costing 0.43% and 0.45% of net asset value for Growth and Income and Merian UK Equity Income respectively, which will be borne by the funds.
The merger will become effective on 24 November 2023, the firm said.
