Neuberger Berman trust to use redemption trigger

The largest investment trust to enter the market this year, the $507m Neuberger Berman Global Floating Rate Income fund, has implemented a redemption trigger that will buy back shares at close to net asset value if the company moves onto a wide discount.

The trust will allow shareholders to redeem up to 50% of their stake at the preceding day’s NAV, less a 1% administration cost, if the trust trades on a 5% discount for any three-month rolling period over the last three months of the year from December 2012. Damian Holland, head of product development for the trust, said the mechanism would ensure shareholders do not lose money. “We feel it makes sense to put in place a redemption trigger as it gives investors an easy way out if the trust drifts out onto a discount, which would result in them losing money,” said Holland. “We do not...