The future of the Mobius Investment trust has been called into question after investors sold almost half of the fund’s shares in a three-yearly redemption facility.
The £167m Mobius Investment trust is set to lose around £72m after investors sold 43% of its shares, reducing assets to below £100m, the level seen as a minimum threshold by institutional investors.
The emerging markets smaller companies investment trust – co-founded by EM guru Mark Mobius in 2018 and run by Carlos von Hardenberg – received redemption requests for over 49.7m shares ahead of yesterday’s deadline (3 November).
Although the trust was only trading at a 7% discount, it has underperformed over one year returning 6% against the 38% sector average, according to a note from QuotedData.
QuotedData’s head of investment company research James Carthew said: “With less than 5% of its assets in China versus a weighting of over 31% in the MSCI Emerging Markets index, Mobius has largely missed out on this year’s rally in Chinese stocks. Consequently, its three-year performance figures are some way behind the sector median.
“It is not surprising that a sizeable proportion of its share register has opted to take advantage of the three-yearly liquidity opportunity. The market cap will likely fall below £100m, which may raise questions about its viability.
“I don’t have a problem with small trusts (as long as they keep their overheads under control) but Mobius will need to demonstrate that it can turn its performance around.”
