The decision follows a “comprehensive review of the company’s strategic positioning with the objective of enhancing shareholder returns”, and aims to improve the trust’s marketability and strengthen its long-term investment proposition.

The trust’s net asset value (NAV) rose 8.8% while the FTSE World Europe ex UK rose 20.9%. The share price also increased 8.4%. Its strongest contributors were Allied Irish Banks, CaixaBank and BE Semiconductor.

The board blamed the difficult market for quality-growth investing, as valuations kept falling while value shares rallied. It also conceded that its stock selection hurt performance, with Adyen, RELX and Nemetschek named as the biggest detractors, falling on fears of disruption from AI. The trust’s portfolio managers have exited all three.

The board confirmed the name change will take effect next month, with a target annual dividend of 4.5% of NAV at the previous 31 August. It will be paid quarterly, with the payout rising each year. It will be partly funded from capital as well as revenue. The company has now delivered more than 20 consecutive years of dividend growth to its shareholders, making it an “Association of Investment Companies (AIC) Dividend Hero”.

Revenue earnings were 8.74p per share, up 26.9% from 6.89p per share the previous year. The year-end NAV was 643.30p. The board also announced that from 1 September the management fee will fall to 0.60% on net assets up to and including £400m, 0.55% from £400m to £1bn, and 0.525% on net assets in excess of £1bn.

Previously, the management fee was 0.65% of net assets up to and including £400m, 0.60% of net assets in excess of £400m up to and including £1bn, and 0.525% of net assets in excess of £1bn.

In May the board declared an interim dividend of 1.75p per share (2025: 1.75p) and is proposing a final dividend of 6.25p per share for the year, up from 5.40p last year.

Under the new tender mechanism, which is designed to strengthen accountability to shareholders and provide a clear route to liquidity in the event of sustained investment underperformance, the NAV total return will be measured against the FTSE World Europe ex UK Total Return Index (GBP) over a five-year period ending in the 2031 financial year.

This is in addition to the company’s existing semi-annual discretionary tender offers, which it did not run in May or November, saying share buybacks had kept the discount stable. The trust bought back 5.4m shares for £31.8m during the year.

The board confirmed that the trust will use gearing more strategically, targeting about 10% when earnings are growing, within an unchanged range of 0% to 15%. It said it will use total return swaps instead of an overdraft because they are cheaper.

Net gearing was around 8.3% at the year end, against net cash of 3.1% a year earlier. The change to the investment policy takes effect immediately without a shareholder vote.

Benjamin Moore became lead manager on 31 March, with Brian Hall as co-manager, after Stefan Gries retired for health reasons. The trust said its NAV beat the index by 4.1% between 31 March and 30 September, and it has repositioned the portfolio towards semiconductors, electrification, civil aerospace and European banks.

It now holds 45 stocks, against 34, with financials up from 12.9% to 23.3% of the portfolio. Since the year end, up to 29 October, NAV has fallen 5.6% against a 3.4% fall in the index, and the discount had widened to 7.7%, from 5.2% at 31 August.

Mr Andrew Impey has been appointed chairman of a separate Nomination Committee and Sapna Shah has been appointed chairman of the Remuneration Committee for the trust. The decision came into effect from 2 November 2026. All Directors will serve as members of both the committees.  

Chairman Andrew Impey, said in the annual review: “Following the thorough review of the Company’s investment approach the Board undertook a comprehensive review of the Company’s strategic positioning with the objective of enhancing shareholder returns, improving marketability and strengthening the long-term investment proposition.”

Over five years, NAV is up 0.5% against 59.1% for the index. The annual meeting is on 10 December.

The trust also confirmed that dividends from Russian securities in the company’s portfolio are held in a frozen custody account in Moscow and “cannot currently be repatriated back to the UK”, following the decision by the UK to sanction Russian assets after its invasion of Ukraine.

The balance as at 31 August 2026 was equivalent to approximately £2.5m at the exchange rate applicable on that date. As there is significant uncertainty that these sums will ever be received by the company, they are not recognised in its NAV or income statement.

The board also monitors the underlying local value of the Russian securities on the Moscow Stock Exchange, which at 31 August 2026 was approximately £21.9m at the exchange rate applicable on that date, although again there is much uncertainty over whether these values will ever be realisable by the company. These investments have been held at a nominal value of £0.01 in the NAV at 31 August 2026.

The company confirmed that Stephen Russell has been nominated as the successor to Peter Baxter, who will retire as a director after the AGM in December. Mr Russell joins with effect from 2 November 2026 and will stand for election at the forthcoming AGM.

He has more than 40 years of experience as a multi-asset fund manager, investment strategist, analyst and non-executive director, with extensive knowledge of the investment trust sector.

He was co-founder and manager of the Ruffer Investment Company and has served as a non-executive director for over 20 years. He also held senior management roles at HSBC and SLC Asset Management. He retired as a non-executive director of JPMorgan European Investment Trust plc in 2021. Mr Russell is currently a non-executive director of F&C Investment Trust plc and Aberdeen UK Smaller Companies Growth Trust.