Mercantile investment trust to address “disappointing” performance

Mercantile Investment Trust says it will work hard with JP Morgan Asset Management to turn around the closed-end fund’s performance.

The investment company revealed a total loss on net assets was 7.2%, compared with a 4.1% loss on its FTSE All-Share index (ex-FTSE 100 and investment trusts) benchmark, for the year to January 31 2012.

Hamish Leslie Melville, chairman of the investment trust, says: “The company’s failure to outperform the benchmark over the financial year to January 31 2012, and over the longer term, is extremely disappointing.

“The board is fully aware that this result is unacceptable and is working hard with the manager to ensure that the company’s investment performance is improved.”

The trust saw its discount widen to 13.6% at the end of January, compared with 10.3% a year earlier.

Mercantile reported an 18.6% rise in earnings per share to 31.9p, thanks to a special dividend from Stagecoach.

The news comes as Jane Lennard departed the investment management team, “to pursue an alternative career”. The new line-up is to be announced in due course.

Leslie Melville adds: “Markets have continued to be strong in our current financial year and the company’s performance is ahead of the benchmark.”