Objective - The objective of the trust is to secure long-term growth in capital and income through a policy of investing primarily in an internationally diversified portfolio of publicy listed equities, as well as unlisted securities and private equity, with the use of gearing. The trust is benchmarked against a composite index of 40% FTSE All-Share Index/ 60% FTSE All World ex-UK.
Heritage - Founded in 1868 as the first ever investment trust
- Pioneered the concept of collective investment, by giving the small investor the same advantage as the large institution by reducing risk through a spread of investments
Today - One of the largest global growth trusts with total assets of £2.6 billion investing in over 680 companies in 35 countries
- Over 100,000 shareholders, including over 80,000 investors through the F&C savings plans
Reputation - Well-known and respected brand, with a reputation for delivering its long-term objectives in a responsible, prudent and effective way
Management - Independent Board of Directors responsible for overall strategy and monitoring performance
- Management of the investments is carried out by F&C Management Limited under contract with a notice period of six months
- External third party sub-Managers are used to enhance investment performance where appropriate.
- Manager incentivised to produce superior performance.
- No cross-directorships, no cross-holdings and no conflicts of interests between the Company and its Manager
Advantages of an investment trust - The ability as a closed-end fund to take a long-term view and ride out difficult conditions – we have ridden through two world wars and many market crashes
- The flexibility to invest in a wide range of assets – we have been increasing our exposure to private equity
- The freedom to borrow money to improve returns to shareholders in rising markets – we have borrowed prudently in foreign currencies at low rates for many years
- The ability to buy back shares to enhance net asset value and reduce discount volatility – we have introduced a buy-back policy to keep the discount below 10% in normal market conditions,
- Low charges to investors, typically well below those for comparable unit trusts – our total expense ratio for 2007 was 0.71%, including performance fee accrual.
- The cumulative benefits of such low costs over many years are very significant for long-term investors.
Potential investors are reminded that the value of investments and the income from them may go down as well as up and investors may not receive back the full amount invested. Tax benefits may vary as a result of statutory changes and their value will depend on individual circumstances.
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