Investment trust Middlefield Canadian Income (MCT) will convert to an actively managed exchange-traded fund (ETF) following a shareholder vote, the first time a London-listed fund has become an active ETF.
Shareholders voted on whether to receive shares in a new ETF or take a cash exit, with almost half of those voting opting to cash out.
As a result, 52.7% of the £150m company’s shares will roll over into the ETF and the balance will receive cash.
The £79m ETF will begin trading on Thursday (23 October) subject to FCA approval.
Managed by Middlefield and supported by HANetf, the ETF will maintain its existing investment objective of delivering high income and long-term capital growth through exposure to high-quality, large-cap Canadian equities with strong dividend profiles.
Middlefield’s proposal to convert into an open-ended fund was the result of a settlement with activist hedge fund Saba Capital, which had a 29% stake in the company.
James Carthew, head of investment company research at QuotedData, said: “So the new Middlefield Canadian Income active ETF will start life with assets of about £79m. That’s not bad, but we are fascinated to see how things go from here.
“Many are predicting great things for active ETFs and we are going to be covering them in more detail over time.”
