View the article online at http://citywire.co.uk/money/article/a882910
Hargreaves's Dampier joins Invesco investment trust board
Mark Dampier, head of research at Hargreaves Lansdown, sets aside his doubts of investment trusts to join board of Invesco Income Growth Trust.
Mark Dampier, head of research at Hargreaves Lansdown, the country’s largest funds supermarket, has joined the board of Invesco Income Growth Trust (IVI) as a non-executive director.
The appointment, Dampier’s first outside Hargreaves Lansdown, is a bit of a coup for the £150 million equity income investment trust as the former financial adviser is a well-known financial commentator with a weekly column in the Independent.
Hugh Twiss, Invesco Income Growth chairman, said: ‘Mark brings with him a wealth of experience and wide knowledge of the investment trust world. In addition, his practical involvement, through Hargreaves Lansdown, in the huge growth of unadvised investors over recent years will greatly assist the board in meeting its objective of making Invesco Income Growth Trust plc as appealing and accessible as possible.’
Dampier said he was a fan of equity income funds, which he added would play an increasingly important role as more people retired and looked to take advantage of last year’s pension freedom reforms.
‘Having been an investment trust adviser, supporter and investor for 33 years, I am delighted to have the opportunity to work with the portfolio manager Ciaran Mallon [pictured below] and the board of Invesco Income Growth Trust,’ he said.
The move represents a bit of a propaganda victory too for the £134 billion investment trust sector, which has traditionally languished in obscurity alongside the £835 billion market in open-ended investment companies and unit trusts.
Investment trusts date back to the Victorian era and have proved they can deliver better long-term results for investors than open-ended funds. However, they are more difficult to understand and have lacked the marketing budgets of open-ended funds.
As the UK’s biggest investment broker, Hargreaves Lansdown has for a long time expressed scepticism towards investment trusts. Peter Hargreaves, co-founder of the Bristol-based firm, once dismissed them as ‘fuddy duddy’ and ‘dinosaurs’ on the brink of extinction.
Critics say Hargreaves didn’t like investment trusts because before 2013 brokers did not earn commission from investment trust groups in the way they did on open-ended funds.
Dampier has taken a more positive view, however, in interviews recognising the advantages that investment trusts’ ‘closed-end’ structure and use of gearing (borrowing) can bring investors.
Nevertheless, he has never selected an investment trust for Hargreaves Lansdown’s influential ‘Wealth 150’ list of fund recommendations, arguing the tendency for the shares to trade either below or above their underlying net asset value made them unsuitable as mass-market savings plans.
Inclusion in Wealth 150 could drive an investment trust share price to a dangerous premium, he feared.
Nevertheless, Hargreaves knows how to move with the times and has recently improved the online information it provides on investment trusts after the sector enjoyed a renaissance after the abolition of commission.
It has backed two of the biggest investment trust launches of recent times, heavily promoting star fund manager Anthony Bolton’s attempted comeback with Fidelity China Special Situations (FCSS ) in 2010 and last year’s record £800 million launch by Neil Woodford of the Woodford Patient Capital Trust (WPCT ).
His admiration for Woodford may be another factor in today’s appointment.
On the face of it, the choice of Invesco Income Growth as Dampier’s first birth as a non-exec is surprising. Although Mallon has a Citywire AA performance rating, the trust is less well known than stable mates Edinburgh (EDIN ) and Perpetual Income & Growth (PLI ), which also sit in the UK Equity Income sector and have a more impressive track record.
However, they are now run by Mark Barnett (pictured above, right), the Citywire AAA-rated fund manager who succeeded Woodford as Invesco Perpetual’s head of UK equities and manager of its big income funds.
Dampier slighted Barnett by backing Woodford over Invesco Perpetual, adding his first fund, Woodford Equity Income , to the Wealth 150 list while excluding the Income and High Income funds now the hands of Barnett.
Of course investment trust boards are meant to independent of their fund managers and doubtless such considerations were not in play.
As it stands Invesco Income Growth has not had a new board director for five years. It could do with a fresh face even if with Dampier it has one that has not always beamed too kindly on investment trusts.
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by Gavin Lumsden on Sep 30, 2016 at 17:23