LONDON, Sept 14 (Reuters) - Veteran investor Terry Smith's Fundsmith Emerging Equities Trust will close due to underperformance and will return proceeds to shareholders, the British investment trust said on Wednesday, driving its shares 10% higher.

Smith, CEO and CIO of Fundsmith and ex-boss of broker Tullet Prebon, said in a statement that the trust's returns had "fallen below our expectations", adding that "it would be in the best interests of shareholders to receive their investment back in cash through a liquidation of the portfolio and wind-up of the company".

The trust plans to close by the end of November, subject to shareholder approval.

The trust's shares leapt 10.3% to eight-month highs of 1,341 pence on the news.

The trust has 378 million pounds ($435.68 million) in assets under management, according to Morningstar data.

Smith's main Fundsmith Equity Fund has 23.5 billion pounds under management. Its holdings include Unilever.

Activist investor Nelson Peltz's Trian Investors 1 UK investment trust said earlier this month it would close, following a campaign by disgruntled shareholders.

($1 = 0.8676 pounds) (Reporting by Carolyn Cohn, Editing by Louise Heavens)