Investors holding Golden Prospect Precious Metals (GPM) are facing a question the June 2026 interim accounts raise but do not fully answer: what are the Golden Prospect Precious Metals costs of running a simultaneous share buyback and a dividend policy both funded by selling the trust’s own investments?
The question is not pedantic. When a closed-end fund (a trust with a fixed pool of assets, unlike an open-ended fund where money flows in and out) sells holdings to return cash to shareholders, those sales carry friction. Dealing spreads, broker commissions, and any tax drag on realised gains all reduce what shareholders actually receive. If those costs are not disclosed clearly, holders cannot assess whether the strategy creates or destroys value.
How the Golden Prospect Precious Metals Buyback Has Progressed
GPM launched its share buyback programme in April 2026. According to an EGM notice published on Investor Meet Company, the trust had repurchased 25,586,121 ordinary shares since the programme began. An earlier RNS, republished by ADVFN, reported a lower figure of 13,950,211 shares, representing 12.9% of issued share capital at that earlier point in the programme. The higher figure reflects subsequent purchases.
At the annual general meeting on 5 June 2026, shareholders approved authority to buy back up to a further 15,216,205 shares, equal to 14.99% of issued share capital, according to Investing.com’s coverage of the renewal. That renewal is standard practice for investment trusts, which must seek fresh authority each year, but it signals the board intends the programme to continue at scale.
Buybacks, in principle, benefit remaining holders by reducing the share count. When GPM trades at a discount to its net asset value (NAV, the value of the underlying portfolio per share), buying shares in the market and cancelling them or placing them in treasury is accretive to NAV per share for those who stay. The mechanism works. The cost question is about what it takes to fund it.
Selling Assets to Buy Back Shares: the Hidden Friction
To generate the cash for buybacks, GPM must sell holdings in its precious metals equity portfolio. Each sale involves a dealing cost. Each sale in a rising market also means locking in a gain and potentially crystallising a tax liability (GPM is incorporated in Guernsey, which carries its own tax treatment, though the trust pays a flat annual Guernsey exemption fee of just £1,600). The portfolio itself ran at over 100% equities relative to net assets in the June 2025 interim accounts: total equities of £66,507,125 against net assets of £61,715,831, with a cash deficit of £5,037,818. That structure, where the trust was effectively geared into its equity holdings, means selling assets to fund buybacks reduces the gearing but also reduces exposure to any further upside in precious metals prices.
For context on how far the trust has grown, net assets stood at £35,412,242 in the June 2024 interim accounts, per the LSE RNS filings. By October 2025, gross assets had reached £106.1 million, with a NAV of 102.90p per share and a mid-market price of 86.30p, reflecting a discount of 16.13%, according to the October 2025 monthly investor report on Investegate. The trust had recorded a 58.94% NAV gain in the three months to that point.
That performance made GPM the top-performing investment trust for the year ended 31 December 2025, as confirmed by the annual report and AIC recognition. The trust also won Citywire and Investment Week category awards in the Specialist sector. Against that backdrop, the decision to introduce a dividend policy funded by selling investments is worth examining carefully.
GPM’s stated investment objective has always been capital appreciation, and for the year ended 31 December 2023, directors recommended no dividend at all. A dividend policy now funded by liquidating portfolio holdings is a structural change. For an ISA or SIPP holder, income sounds attractive; but if the dividend is simply carved out of the portfolio rather than generated by it, the total return equation may not improve.
There is also a management backdrop to factor in. The trust’s portfolio managers, Keith Watson and Robert Crayfourd, resigned from Manulife CQS Investment Management in March 2026. Who is managing the portfolio through this transition, and at what cost, is a question the interim accounts should address plainly.
The discount of 16.13% as of October 2025 is the level to watch. If buybacks narrow that discount meaningfully and the programme’s dealing costs are modest relative to the NAV uplift delivered, the case for continuing holds. If the discount widens again as the portfolio is pruned to fund both buybacks and dividends, holders will need to reassess.
