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Hundreds lose out as Euro fund collapses

Hundreds of investors in the Jupiter European investment trust have seen their investment reduced to nothing after the fund&#39s default rollover trust collapsed to zero net asset value.

The Jupiter European split-cap trust rolled up last November, giving investors the option to redeem their investment or roll over into the new Jupiter European opportunities investment trust or Aberdeen&#39s European growth & income trust.

Investors who failed to specify a preference were automatically switched into the Aberdeen European growth & income split-cap. A year later, the fund has an NAV of zero.

Of the £190m in the Jupiter European fund, £31.6m went into the Aberdeen fund, of which £16m arrived by default.

Attempts are being made to rescue the European growth & income trust. Last week, the board said it was “in discussions with its advisers in respect of preliminary proposals received by the company from a third party”.

Commenting on the Jupiter European rollover, Christows head of investment trusts Nick Greenwood says: “Even with 20/20 hindsight, it does appear unsatisfactory that highly geared securities were allocated via a default mechanism.”

Aberdeen Asset Management marketing director (inv-estment trusts) Piers Currie says: “Investors moved from one European split-capital trust into another. The board wanted to give similar exposure in a similar vehicle. They were not moved into something they did not understand.”

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