The Merchants Trust (MRCH) Overview

What is The Merchants Trust?

Managed by Allianz Global Investors, with Simon Gergel leading the portfolio since 2006. Merchants aims to pay an above-average and rising income, plus long-term capital growth, by investing mainly in higher-yielding large UK companies. Think well-known names like Lloyds, Shell, GSK and Rio Tinto. It uses a ‘value’ approach, buying solid businesses the manager thinks the market has priced too cheaply. Launched in 1889, it is the oldest trust in the AllianzGI stable and has raised its dividend every year for 44 years.

Why is it rated by Boring Money?

This is a UK equity income trust and so the main story is one of dividends, which have increased every year for over 40 years. The current yield is about 4.5%.

Core holdings include Lloyds, Shell, Reckitt and GlaxoSmithKline. The Trust leans into a value style, which means the manager aims to buy good quality companies when they are cheap. With almost 40% of holdings coming from the smaller FTSE 250 index, the Trust doesn’t just hold the same FTSE 100 names as other UK-focussed competitors.

Gearing (or the amount borrowed to buy more shares) is about 10%, which means the Trust will do better when conditions are good and worse when conditions are bad, making it a little more volatile than some peers but also potentially more rewarding.

Holly MackayCEO and Founder, Boring Money

How has Merchants Trust performed?

All data herein is sourced from FE fundinfo and is correct as at end August 2026. Boring Money is not responsible for any data discrepancies.

Why look at it now?

Merchants offers a yield of around 4.3% and its shares trade at a discount of about 5% to the value of its investments. The manager argues the UK is still one of the cheaper stock markets in the world, and that medium-sized UK companies look especially cheap next to the giants. The trust has leaned into that part of the market. It has paid off lately: over the year to end August 2026 its share price returned 30.0% against 21.3% for the FTSE All-Share. Over three and five years, though, it is still behind the index.

What is the risk rating for Merchants Trust?

We rank this at 5/5 on our chilli scale for riskFor a guide on how spicy any trust is, we use FE fundinfo’s Risk Score and sort the trusts into one of our 5 chilli bands. Cash would be no chilli. A non-volatile smooth trust would be 1 or 2. The FTSE 100 would clock in as 4 chillies. Anything very volatile and spicy is a 5..

Merchants invests in big, established UK companies, so it moves broadly with the UK stock market. The main extra risk is gearingThe act of borrowing money to fund a company's operations. It can be expressed as a ratio, where the cost of the borrowed amount is compared to the overall value of the company - this is called the gearing or leverage ratio. : it borrows to invest (currently about 9.6% of net assets, with a policy range of 10–25%). That boosts gains when markets rise but makes losses bigger when they fall. Around 65% of the management fee is taken from capital rather than income, which helps the dividend A payment made by a company to its shareholders, typically representing a distribution of the company's profits.but holds back capital growth. It can also sell options on some shares to earn extra income, which can cap gains if those shares rally. Best held for the long term as part of a diversified The process of spreading your investment portfolio across different asset classes, such as partially in shares and partially in bonds, in order to reduce risk.portfolio.

Where does Merchants Trust invest?

Geography: UK 93.4% | Europe ex UK 6.6%

What sectors does Merchants Trust invest in?

Led by financials (including banks such as Lloyds and Barclays), consumer names and industrials, with energy and healthcare also featuring. Only a small slice is in technology.

What are the top holdings?

Merchants is well spread, with 53 holdings and no single company above 6% of the portfolio. The top ten make up about 36% in total. Expect household UK names: banks (Lloyds, Barclays), oil and gas (Shell, BP, Harbour Energy), pharmaceuticals (GSK, Hikma), consumer goods (Reckitt) and mining (Rio Tinto), plus builders’ merchant Grafton.

Source: The Merchants Trust as at 31/08/2026

What are the key facts? 

Source: The Merchants Trust as at 31/08/2026