JPM Brazil scraps 'no longer appropriate' DCM as trust shrinks

Introduced new long-term discount target

The board of the £24m JP Morgan Brazil investment trust has removed its "no longer appropriate" discount control mechanism, which has been in place since the vehicle launched in April 2010.

The original discount-triggered tender mechanism involved the fund holding a 15% tender offer at a 2% discount to fair asset value (FAV) if the discount exceeded 5% over the 30 days to 31 January and 31 July each year, respectively. In order to limit the discount, shares must be repurchased, and the board has bought back 6 million shares, worth 15% of the share capital, since its AGM in September last year. This means the authority granted has been exhausted. However, the board has found that a combination of this strategy along with a "difficult underlying Brazilian equity market and...