Highlighting the Foreign and Colonial Investment Trust as it celebrates 150 years of existence.
150 years not out for Foreign and Colonial Investment Trust
Queen Victoria was on the throne and Benjamin Disraeli was Prime Minister when the Foreign & Colonial Investment Trust was launched in 1868. As the first of its kind, it paved the way for the growth of investment trusts and this week, it is celebrating an impressive 150 years of existence, establishing it as the only collective investment scheme working for savers and investors for this long.
Investment trusts are products that we continue to promote as solid alternatives to funds. This is because you have the reassurance that somebody is managing the portfolio whilst at the same time investors get the increased flexibility of buying and selling throughout the market trading day as well as the potential to pick up a discount as the price is driven by market demand often resulting in a price discount to the net asset value. The Foreign & Colonial Investment Trust sits firmly within The Share Centre’s preferred list of investment trusts and rightly so for a number of reasons.
One of the core reasons for its popularity amongst retail investors is the income it generates. The trust has paid a dividend every year since its inception 150 years ago and has a highly impressive 45 years of continuous dividend growth. The objective of the trust is to secure long-term growth in capital and income from an internationally diversified portfolio of listed equities, unlisted securities, private equity and active use of gearing and perhaps not surprisingly given its age is amongst the largest in its class.
In 2018, this is now a highly diversified global trust, with over 450 holdings and a lead weighting to North America (48%). Commenting on the Anniversary, current manager Paul Niven jested, “We started out in 1868 investing in Emerging Market bonds including Brazil – so we have moved from literally investing in the Amazon – to purchasing Amazon.com some 140 years later.” Investors should appreciate that the fund has outperformed its benchmark since 2014 when Paul Niven was appointed.
The sector, although dwarfed by its open-ended cousin, has always retained a loyal following and in recent years has seen an increase in the level of new funds launched, many of which have offered exposure to a wider range of asset classes.
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