Rathbone proposes merger of Rathbone Blue Chip Income and Growth fund into the Rathbone Income fund

6 August 2018 - Rathbone Unit Trust Management Limited ('Rathbones') has proposed the merger of its Blue Chip Income and Growth fund into the Rathbone Income fund.

Subject to unit holder approval at an extraordinary general meeting on 3 October 2018, the merger will take place on 5 October 2018. Rathbones will bear all of its costs and the costs of the fund’s legal advisers arising from the merger.

Commenting on the proposal, the company said: “While the Rathbone Income fund has been attractive to a broad investor base, the Rathbone Blue Chip Income and Growth fund has failed to resonate with investors, because there has been too little differentiation between the two funds. We attempted to differentiate the Rathbone Blue Chip Income and Growth fund by making it a more focussed, higher conviction portfolio, but a result has been greater volatility, which is perhaps not the best outcome for investors.”

By merging the two UK equity income funds, Rathbones says investors should see benefits in terms of economies of scale and lower expenses.

As a result of the merger, Alan Dobbie, fund manager of the Rathbone Blue Chip Income and Growth fund will join Carl Stick as a co-manager on the Rathbone Income fund. Alan has worked with Carl and his team for more than 10 years.

Should the merger be agreed, unitholders in the Rathbone Income fund or the Rathbone Blue Chip Income and Growth fund that do not wish to continue to hold units in the combined fund will have the right to redeem part or all of their shares at any time, free of any charge (except for any possible charge necessary for the fund to meet disinvestment costs), and subject to the procedures in the latest prospectus of the fund.

Please note that unitholders who are normally resident in the UK may be liable to UK taxation on capital gains arising from the sale or other disposal, including redemption of their units.