MAM investment trust to cut dividends as part of overhaul

The board of the Midas Income & Growth Trust has made a number of changes to the closed-end fund, which has included cutting the dividend.

In the trust’s half year report for the six months to 31 October, the board said it would cut dividend to 5.2p per annum from 6.52p.

The board said current dividend payments had been covered, in part, by revenue reserves.

However, the board said although the revenue account position had improved in 2011, if the current dividend level were maintained it would again be uncovered.

“Having regard to the challenging economic environment and, following discussions with your manager, your board has concluded that dividend growth from the current level is unlikely for several years,” it says.

The investment trust – managed by MAM Funds – will also increase core allocation to overseas equities to 25% from 15% in a move to increase access to developing markets, with the core allocation to fixed income reduced by 10%.

The benchmark will change to three-month Libor plus 3%, over a rolling three year period, replacing its existing benchmark of an absolute return of 8% per annum.

Midas has agreed to drop its performance fee. while the annual fee will be recuved to 0.9% based upon market capitalisation instead of net asset value. The board have also said it will move to annual continuation votes.

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