ShareSoc Recommends Voting Against the Changes Proposed to the Edinburgh US Tracker Trust

PRESS RELEASE 24 (09/05/2012)

ShareSoc (the “UK Individual Shareholders Society”) is urging shareholders in Edinburgh US Tracker Trust to vote against the directors’ proposal to change this company from a tracker fund to an actively-managed fund, as it appears to be against the interests of the investors in this company.

Edinburgh US is an investment trust that has been successfully tracking the American stock market (the US S&P 500 index) since 1997 at very low cost (total expenses of 0.38% a year*), and at a very low NAV discount.

The directors propose to change the company to an actively-managed fund in the same market, on the grounds that “growth in the Exchange Traded Funds market has made it more difficult to attract substantial new demand”.

However, the consistently low discount (5.8% to NAV at 31st December*) compared to most investment trusts suggests that demand for the fund remains strong, and the fund, with a value of £220million (at 31st December*) is in little danger of becoming too small to be viable.

The benefit of this proposal to the fund managers is obvious: they would continue to manage the fund, but annual fees would increase fourfold, from 0.2%* to 0.8%**.

However, there is no apparent benefit to existing shareholders who have chosen to invest in this fund because of its existing investment mandate:

The cost of the management fees would increase fourfold, and the total running costs would increase from 0.38%* a year to around 1.1%**, plus there would be much higher dealing costs that tend to be incurred by actively managed funds;
Edinburgh US Tracker is the only US tracker investment trust, and no provision has been made for existing shareholders who wish to remain in a tracker investment trust because of the superior performance and low fees of passive investment trusts compared to other passive vehicles; 
Strong evidence shows that actively-managed funds will on average significantly under-perform the equivalent tracker funds over the medium and long term;
 The proposal document gives no indication of the proposed investment manager’s track record;
 There is no indication that the directors have gone through any process of investigating alternative fund managers with proven track records, of which there are many;
 Actively-managed investment trusts often have much higher discounts than passive trusts, so switching is likely to increase the discount and reduce the value of each share.

The company’s AGM and General Meeting will be held in Edinburgh on 29th May.

* From Edinburgh US Tracker trust plc Annual Report, year ended 31 January 2012;

 ** From Edinburgh US Tracker Trust plc Circular dated 27 April 2012.

SHARESOC RECOMMENDS SHAREHOLDERS VOTE AGAINST THE CHANGE OF INVESTMENT POLICY AT THIS COMPANY.

For further information, please contact:

Roger W. Lawson,
Chairman,
ShareSoc Telephone: 020-8467-2686
Email: info@sharesoc.org

Note any members of the press who wish to receive a complimentary copy of our informative monthly newsletter should send a request to info@sharesoc.org . Our newsletters cover not just the affairs of our organisation but contain general financial news and commentary. An example of our past newsletters is available on our web site. You can also follow ShareSoc on Twitter from @ShareSocUK.

About the UK Individual Shareholders Society (ShareSoc)

ShareSoc represents and supports individual investors who invest in the UK stock markets (and who own as much as 30% of the shares in UK public companies in aggregate). We are a mutual association controlled by our members with “not-for-profit” articles and incorporated as a company limited by guarantee. The organisation is financed by member subscriptions, donations from supporters and by the services it provides to members. Associate Membership of ShareSoc is free and is open to everyone with an interest in stock market investment. More information on ShareSoc can be obtained from our web site at www.sharesoc.org .

Post Date: May 9, 2012

Group description:	All levels of experience welcome. A typical meeting agenda includes: – Macro Environment – Trades: Members review existing positions and identify securities with promising TA entry patterns or setups and with suitable risk/reward. Any security, long, short, futures, options may be considered. The convener takes actual positions in trades and maintains his own detailed ledger, accurately measuring performance of individual securities and cumulative activity. Members are notified by e-mail prior to the entries or exits that are decided upon. Following each meeting an updated copy of the ledger is circulated together with the next meeting agenda. Members may wish to maintain similar ledgers of their own but there is no obligation to do so. – Technical Analysis: Techniques and systems used in trades. Members can request discussion of particular aspects of TA.
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Group description:	Following the launch of the SIGnet Technical Traders groups, it was identified that there were a number of members who use fundamental and other information as their main source of choosing companies to invest in, who would find some understanding of technical analysis helpful to identify good entry and exit points for their investments. This new SIGnet Technical Analysis in Support of Investing group is therefore being launched and we welcome members of all levels of experience to join.
Meeting Type/Venue:	Online via Zoom
Meeting Frequency/Timing:	There will be an initial Zoom meeting on Monday 29th April at 7pm to launch this group, please email info@sharesoc.org if you are interested in joining.

Group description:	A new in person group coming soon! Keep and eye on our Events page to register for the launch meeting.
Meeting Type/Venue:	In person
Meeting Frequency/Timing:	TBC

Group description:	Open to all investors / people with an interest in investing. Typical meeting will involve members talking about recent purchases, successes, failures and possible future purchases. Also with occasional visiting speakers or members making presentations on a topic of interest.
Meeting Type/Venue:	We aim to meet on the last Tuesday of each month in a private room at a pub in Playhatch. Start time 7pm with members encouraged to meet up around 6pm for a bite to eat / drink before hand, if their diaries allow.
Meeting Frequency/Timing:	7pm on the last Tuesday of the month. Meetings likely to last about two hours but with informal ‘overspill’ before / after.

Group description:	This group was set up as a forum to discuss companies in detail, each company is introduced by a member and discussion may last one or two hours. Membership is by invitation only and is for experienced investors.
Meeting Type/Venue:	The group meets at a venue in Waterloo, London.
Meeting Frequency/Timing:	Meetings are on Tuesday mornings at two month intervals.

Group description:	Our group members have wide ranging investment experience and work backgrounds. Discussion topics include reviewing our recent stock or collective investment buying and selling activity, plus what we are considering buying or selling and the reasons for our decisions. We also have a wider discussion on where we think opportunities might arise in the next few months and what we think needs to be avoided. Members occasionally lead discussions on specific topics such as recent events attended, articles or books of interest and sources of investment ideas and information.
Meeting Type/Venue:	During the pandemic our meetings were held on Zoom, but we have now resumed meeting in person at a location a few miles to the west of Colchester. Most meetings will now be in person, but it is possible that occasional meetings will be held on Zoom in special circumstances.
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Group description:	An online group for those who are new to investing. Including topics such as how to buy and sell shares, unit trusts, investment trusts, exchange traded funds and diversification, tax and how to save it, pensions, portfolio management and research tools, other asset classes and basic technical analysis.
Meeting Type/Venue:	Online using Zoom.
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Group description:	Group focused on active investing, primarily in small / medium cap UK equities.
Meeting Type/Venue:	Regular Zoom meetings interspersed with occasional face to face meetings and social activities in the North West.
Meeting Frequency/Timing:	Monthly on Saturdays at 10am.

Group description:	Our group covers a wide spectrum of mainly stock market investing and trading from equities – which include shares, ETF’s Investment and Unit Trusts. We normally rotate the meeting chairperson (responsible for creating, with member’s help, suitable agendas) and a meeting presenter (members take it in turns to provide a 15 to 45 minute presentation on a subject of their choice). Various investing topics of interest are regularly discussed such as software, brokers, investing categories and markets and any related topics of interest.
Meeting Type/Venue:	Meetings will be returning to in-person in a private room at a West London golf club, close to an underground station. In the meantime monthly video calls and an in-between meeting email group will continue.
Meeting Frequency/Timing:	In-person meetings will be held on the second Wednesday of each month in the afternoons, following a golf club one course lunch.

ShareSoc Recommends Voting Against the Changes Proposed to the Edinburgh US Tracker Trust

PRESS RELEASE 24 (09/05/2012)

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