JPMorgan Global Growth & Income (JGGI ) has swallowed up another trust in the form of Henderson International Income (HINT ).

HINT’s £370m portfolio of global equities will be rolled into JGGI, which has already grown to a mammoth £3.1bn market capitalisation through a series of mergers, including Scottish Investment Trust and JPMorgan Elect in 2022, and JPMorgan Multi Asset Growth & Income last year.

HINT investors will be rolled over automatically into JGGI with no cash option offered ‘in light of the strong rating and liquidity of JGGI’s shares and the similarity of the investment strategy’, given both trusts invest in global equities and provide an ‘attractive level of income’ – JGGI is currently yielding 3.4% to HINT’s 4.6%.

The equity income merger will be beneficial to both sets of shareholders, said JPMorgan, given JGGI’s strong performance, with net asset value (NAV) total returns of 22.4% over one year,and 49.2% over three years. HINT’s portfolio has delivered 9.6% and 17.8% underlying gains, including dividends, over the same periods.

In a tricky spell for most active managers, that means JGGI has been well ahead of the MSCI World global index, which returned just under 42% in the same three-year period to end of January. 

HINT shares jumped 7.7% to 181p on the news, while JGGI shares edged 0.7% lower to 605p.

HINT shareholders will benefit from an immediate uplift in value of 14% given ‘the relative ratings of the two trusts, with JGGI trading on a premium of 2.1% and HINT on a discount of 10.8%’, said its board. 

Richard Hills, chair of HINT, said that the merger would ‘provide shareholders with access to a larger, more liquid vehicle with an outstanding track record and a history of growing dividends while focusing on the most attractive investment opportunities’.

He also noted the reduced management fee, given the enlarged JGGI will pay 0.3% of NAV in incremental annual management fees, resulting in a blended management charge of 0.38% versus the 0.575% of NAV fee that HINT currently charges.

James Macpherson, chair of JGGI, said the trust has the fourth-lowest ongoing charge in the investment trust industry at 0.42%.

‘Added to that, JGGI’s long-term performance track record and sustainable dividend gives my fellow directors and me great confidence in the team’s ability to navigate whatever challenges the future holds, and we remain open to further consolidation opportunities,’ Macpherson said.

The latest JGGI merger follows calls for more consolidation in the investment trust sector, with a need for larger, more liquid funds, particularly to entice wealth managers back to the space.

JGGI, which is managed by the trio of Helge Skibeli, James Cook and Timothy Woodhouse, was one of the most-bought trusts by retail investors last year, according to Deutsche Numis analysis. 

‘We view this transaction positively,’ said Panmure Liberum analyst Shonil Chande.

‘We have noted the scope for consolidation in the industry, and the proposed combination brings together aligned investment strategies, especially following HINT’s strategic evolution in recent years to increase the focus on capital returns as well as income.’