Investment trust mergers have become pretty standard fare this year, and in that context it's unsurprising to see the announcement that Asia Dragon (DGN) will disappear via a combination with rival fund Invesco Asia (AIT).
But the tie-up is unusual in one sense: DGN's market capitalisation of more than £650mn makes it one of the big beasts in its sector, putting this combination at odds with a trend that has seen smaller trusts look most vulnerable to consolidation. That's a good reminder for investors (and boards) that even big trusts can vanish if, as with Asia Dragon, the performance track record is poor.
So are the big beasts holding their own elsewhere? If we look at the main AIC equity sectors it appears as though plenty of the largest trusts do warrant their size, at least when judged by share price total returns over a five-year period. Take Fidelity European (FEV), Templeton Emerging Markets (TEM), Schroder UK Mid Cap (SCP), Pershing Square (PSH) or JPMorgan Japanese (JFJ) as examples of big trusts that have performed well versus their respective sectors over this period and therefore arguably deserve some faith for now.