We have mentioned in the past that the allocators we cover tend to avoid using investment trusts for their equity exposure.

The AIC UK Equity Income sector is one of the biggest trust sectors but of the 80-odd fund holdings in our database only four of those are trusts (and two of these are in Finsbury Growth & Income).

Well, the options available to allocators are about to fall even further.

One of the UK equity income trusts in our database is Troy Income & Growth which is held by a solitary DFM and yesterday afternoon the board of this trust announced that it had agreed to merge with STS Global Income & Growth.

Both of these funds are run by Troy Asset Management but, as our astute readers will have noted, they have two different mandates: one is a UK equity income fund and the other is a global equity income fund.

The other point of distinction is that STS isn't held by a single one of the allocators we follow.

The board of the Troy trust has said it will be liquidated and its assets transferred to STS. STS shares will then be issued to Troy shareholders who will also be given the option of a 100 per cent cash exit.

James Harries, who runs the STS trust (as well as the £900mn Trojan Global Income fund), will manage the merged trust.

Certainly the merger will create a bigger trust (which is the rationale for the move). The combined trust will be about £352mn in size.

Is there a noteably larger appetite for trusts in the global equity income sector of our database? Not really. Of the 18 global equity income funds held in our database, not a single one of them is an investment trust.