Merchants Trust (MRCH)

MRCH is a long-established investment company that has been providing dependable income and long-term capital growth for its shareholders since 1889. Managed by Allianz Global Investors, the company runs a diversified portfolio of high-quality, predominantly UK-listed companies with strong balance sheets and consistent dividend histories. Its primary objective is to deliver a rising income to investors alongside potential capital appreciation – and with 42 consecutive years of dividend increases under its belt, the company is one of the AIC’s Dividend Heroes. In this interview we speak to Simon Gergel, manager of the Merchants Investment Trust and head of UK equities at Allianz, about how investment trusts’ revenue reserve structure makes them the perfect vehicle for delivering reliable income; why sound capital management is one of the key attributes he looks for in a bottom-up approach to identifying investments; the trust’s value-led approach, and the current attractions of more cyclical UK sectors including housebuilding, financials and real estate; and why a more stable economic and political outlook alongside depressed valuations underpins his present optimism about UK equities.