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Investment trust company directors say new distribution channels are key to the future of investment trusts

Nov 16, 2009

London 16 November 2009: According to research conducted by J.P. Morgan Asset Management, its second survey of the views of investment trust directors, respondents stated they believe a key to the future prosperity of the sector is by providing private investors and retail savers with easier access to investing in investment trusts.

The report, which was referred to at the recent J.P. Morgan Asset Management hosted Investment Trust Director’s seminar, shows the findings of a survey of investment trust and investment company directors, showed 94% of respondents said they saw greater mainstream retail distribution as critical to the future of investment trusts. The company directors went on to highlight that the key channels for developing a larger retail shareholder base in the future will be through direct platforms (42%) and financial advisers (35%).

Given this view, 49% of respondents therefore considered the lack of focus towards investment trusts among intermediaries as the biggest hurdle to increasing investor uptake, with other issues such as commission/fee structure and discount issues following with 29% and 17% respectively.

David Barron, Head of Investment Trusts at J.P. Morgan Asset Management said, “Investment trusts have always been a superb vehicle for private investors and finding a way to access these investors is key. The shift in focus to mainstream financial advisers and online channels, such as fund supermarkets, has demonstrated a changing attitude in the sector. The swing presents a challenge in terms of building demand for investment trusts by targeting a wider audience and ensuring investors can easily buy and sell them. As a result it is essential that investment trusts use as many tactics as possible to make them more accessible and appealing, including marketing, education and access to platforms.”

David Barron went on to say, “The developing landscape driven by technology and regulation refreshes the new opportunities for investment trusts. For example, the Retail Distribution Review (RDR) has proposed including investment trusts in the universe of retail investment products that advisers must consider in order to call themselves independent. Such regulatory impacts have the potential to increase the education about investment trusts.”

The report goes on to explain how J.P. Morgan Asset Management, as the largest manager of investment trusts in the UK, has taken steps to increase access to investment trusts. The Group is an active supporter of the Association of Investment Companies’ Online Project to introduce investment company centres to leading online research and broking websites and the launch of J.P. Morgan Wealth Manager+, an online wealth manager service for private investors, which will increase accessibility for investors.

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About the survey
The 2009 survey was conducted among an invite list of 1000 investment trust directors during January and February 2009.

For further information please contact:

J.P. Morgan Asset Management
Jayne Fieldhouse
Telephone: 020 7742 8337
Email: jayne.e.fieldhouse@jpmorgan.com

Lansons Communications
Caroline Macleod-Smith
Telephone: 020 7566 9702
Email: carolinems@lansons.com

Notes to Editors
J.P. Morgan Asset Management is part of J.P. Morgan Chase & Co. and is a global asset management leader providing world-class investment solutions to clients. With US$1.3 trillion in assets under management (the Asset Management client funds of J.P. Morgan Chase & Co. as at September 30th 2009) and offices in 40 locations around the world, J.P. Morgan Asset Management offers global coverage with a strong local market presence, and leadership positions in most asset classes.

J.P. Morgan Asset Management is a trading name of JPMorgan Asset Management Marketing Limited which has issued this material in the United Kingdom and which is authorised and regulated by the Financial Services Authority.  Registered in England No. 288553.  Registered office: 125 London Wall, London EC2Y 5AJ.

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