150 years not out for Foreign and Colonial Investment Trust

Highlighting the Foreign and Colonial Investment Trust as it celebrates 150 years of existence.

Article updated: 28 March 2018 5:00pm Author: Graham Spooner

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.

All information given including prices, yields and our opinion is correct at the time of publication. Our opinions on investments can change at any time and for our latest view please go to www.share.com. To understand how our Investment research team arrive at their views please read our Investment Research Policy.

Graham Spooner portrait photo
Graham Spooner

Investment Research Analyst

Graham started out as a fully authorised dealer on the Stock Exchange trading floor and for various banks, before becoming an FSA-approved investment adviser. Now a respected voice in the media, Graham’s share tips and comments on the markets are frequently sought by the national press.

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