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Mark Barnett to step down from Perpetual Income & Growth

The Board of Perpetual Income & Growth Investment Trust has decided to replace Mark Barnett as investment manager.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

  • Mark Barnett to be replaced as manager of Perpetual Income & Growth
  • The Board has been disappointed with performance in recent years
  • The search for a new manager has started with the help of specialist consultants

The Board of Perpetual Income & Growth Investment Trust has decided to replace Mark Barnett as investment manager. It has served Invesco Fund Managers with notice of termination following a period of weaker performance.

Barnett was also recently replaced as manager of Edinburgh Investment Trust for similar reasons. He remains at Invesco and continues to run the open-ended Invesco Income, High Income and UK Strategic Income funds.

Why the change of manager?

The Board has stated they haven't made this decision lightly, especially given the current market environment, which has been difficult for all investors. But it's been concerned with the trust's performance for some time and, now the trust has reached the end of its most recent financial year to the end of March 2020, the Board feels it's time to take action.

Perpetual Income & Growth has underperformed its benchmark, the FTSE All-Share Index, for several years. Over the past five years the trust's fallen 45.0% compared with growth of 2.9%* for the FTSE All-Share, in share price terms.

Since Barnett took over the trust in 1999, it's grown 203.6% compared with 113.7% for the FTSE All-Share, again in share price terms. Please remember past performance isn't a guide to future returns.

Annual percentage growth
Mar 15 -
Mar 16
Mar 16 -
Mar 17
Mar 17 -
Mar 18
Mar 18 -
Mar 19
Mar 19 -
Mar 20
Perpetual Income & Growth Investment Trust -2.9% 4.2% -5.7% -6.0% -38.6%
FTSE All-Share -3.9% 22.0% 1.2% 6.4% -18.4%

Past performance is not a guide to the future. *Source: Lipper IM to 31/03/2020.

The manager's recent period of underperformance is partly due to his value style of investing, which has been out of favour for some time. There have been some stock-specific issues too. This means the share prices of some companies have fallen because of issues that are specific to those companies, as opposed to wider market movements or the manager's style.

The Board is mindful the broader market environment has been a headwind for Barnett, but their decision to replace him follows increased scrutiny of his investment approach, regular reviews, and discussions with the manager. They feel that any improvements that we've seen in performance have been short lived.

What happens next?

It has been a disappointing few years for holders of the trust. Many of the companies Barnett invests in have been severely out of favour, and this has been a significant headwind for performance.

We also recognise all fund managers go through periods of poor performance and that different investment styles will come in and out of favour. Investing is a long-term endeavour and patience is a must.

The Board hasn’t yet announced who the replacement fund manager will be for the trust. It has started a search for a new manager with the ability to deliver capital and dividend growth over the long term. Mercer, a leading global consultancy firm, and Winterflood Securities Limited, the trust's broker and financial adviser, will help lead the search.

We will update investors once any further information on the potential new manager is available.

Find out more about the Trust including charges

Key investor information

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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