Fund Profile

Disclaimer

Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by F&C Investment Trust. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

Overview
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Overview

F&C Investment Trust (FCIT) offers investors a well-diversified equity strategy, combining multiple different listed investment strategies and private equity holdings into a single portfolio. Its ongoing allocation and stewardship is the responsibility of its portfolio manager, Paul Niven. FCIT is one of the more distinguished trusts within the AIC universe, as it is the oldest continually operating investment trust and has celebrated its 50th year of continuous dividend growth, having grown its dividend by 4.3% over 2020.

FCIT’s strategies are predominantly run in-house by BMO Global Asset Management, given the natural synergies that arise; however, it retains a number of external managers Paul believes are best-in-class. One of the more defining features of FCIT is its dedicated allocation to private equity, which Paul has continued to develop during his tenure, with additional new capital having been committed over 2020. ESG has also become increasingly important to FCIT, with adjustment having been made to its portfolio to accommodate this; we detail all the major changes Paul has recently made in the Portfolio section.

Paul continues to deliver strong performance figures, while simultaneously fulfilling the trust’s dual mandate of both income and capital growth. Since taking over the trust Paul has delivered returns marginally ahead of global equities, with his stewardship of the trust having been particularly impactful during the pandemic. We outline both the long-term performance of the trust and the contributions of individual strategies in the Performance section. Despite the competitive performance and illustrious dividend history, FCIT currently trades at a discount, whereas in the years prior to COVID-19 it had largely traded at a slight premium.

Analyst's View

We believe that FCIT continues to offer investors a ‘one-stop shop’ solution to global equity investing. This is not simply the result of its competitive long-term performance and strong dividend history, but also through the active stewardship lead manager Paul Niven provides. The nature of his oversight can give investors confidence that FCIT is unlikely to be overexposed to a single factor or style, remaining a balanced approach to equity investing regardless of prevailing market conditions.

Paul’s stewardship continues to add value to FCIT, beyond simply fulfilling its objectives of capital and income growth. He continues to make FCIT a more unique offering within the global equity space, thanks to increasingly utilising private equity strategies and his recent inclusion of a sustainable equity allocation. We view the latter, along with a commitment to net zero carbon and other progressive policies, as clear evidence of the board’s increasing dedication to ESG integration, which we believe places FCIT on a trajectory towards improving ESG credentials further relative to its peers.

As we come out of the pandemic and the momentum behind the associated factors dissipates (be it for the ‘COVID-19 winners’ or the vaccine recovery trade), a more balanced approach may become more prudent. Economic normalisation may prevent any one style of investing returning to the forefront as it did over the last 12 months, rewarding investors like Paul who value a diversified yet market-aware approach to investing.

Bull
Bear
Well-diversified portfolio which combines listed and unlisted equity
May underperform during momentum- or narrowly driven markets
Clear commitment to ESG and the improvement of its integration
Unable to fine-tune or quickly adjust the portfolio as fast as a conventional listed equity strategy can
Post-pandemic discount is an attractive entry point
Gearing can amplify losses on the downside
Continue to Portfolio

Fund History

17 Aug 2022 The world for sale
While investment trusts are lagging their open-ended cousins in the global sector, their discounts may provide an attractive entry point...
20 May 2022 Is it time to ditch index funds?
Averaging out makes sense in a boom market but may be much riskier in the future…
30 Mar 2022 You say tomato…
Do it yourself or put it into a global fund and leave it to the experts - our analyst debate the merits of each approach...
02 Mar 2022 Spread 'em!
We explore how much dispersion in returns of stocks drive the differing fortunes of trusts…
13 Dec 2021 Fund Analysis
FCIT’s broad-based approach to global equity investing has let it capitalise on current markets, being one of the sector’s best performers recently…
03 Nov 2021 Don't fear the reaper
With market direction hard to call, we consider the case for taking a long-term view in the investment trust sector…
19 Aug 2021 Pandemic immunity
We ask which global equity trusts have outperformed through the different stages of the pandemic…
04 Aug 2021 60/40 and other dinosaurs
A simple practical step to take your portfolio from the 1990s into the 2020s...
10 Jun 2021 Green is good!
2021 will see billions dedicated to sustainable initiatives, which brings with it a host of possible investment opportunities...
21 May 2021 Fund Analysis
FCIT is celebrating its 50th year of consecutive dividend growth…
12 Mar 2021 Results analysis: F&C Investment Trust
We examine the full year results released by the board of FCIT, assessing what has driven the trust’s performance and how it continues to offer a unique proposition in the global equity space…
19 Nov 2020 Fund Analysis
FCIT offers a well-diversified global multi-strategy portfolio at an attractive discount…
23 Oct 2019 Fund Analysis
One of the world’s oldest investment trusts, F&C Investment Trust is on course for its 49th year of consecutive dividend increases...
13 Dec 2018 Fund Analysis
The world’s oldest investment trust is on course for its 48th consecutive year of dividend increases having paid a dividend every year since launch...
View all

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