The Merchants Trust

Merchants Trust aims to achieve a high and growing income and long-term capital growth from a relatively concentrated portfolio of mainly blue-chip UK equities. The trust has one of the highest yields in its peer group (4.9% at end January 2015) and has grown its ordinary dividend in each of the last 32 years. It has been managed by Simon Gergel, Allianz’s chief investment officer for UK equities, since April 2006.

In this interview Simon Gergel starts by setting out the trust’s objective. He then discusses how the fall in the oil price may affect the portfolio and notes that recent US dollar strength is a positive for the trust’s c 30% direct US dollar exposure. He goes on to explain how an indecisive UK election result could, paradoxically, be a relatively good outcome for the stock market, details some recent changes in the portfolio and concludes by outlining how he is beginning to take positions that would benefit from higher interest rates in the US.