Foreign & Colonial Investment Trust (LON:FRCL) is the world’s oldest investment fund, heading towards its 150th birthday. Since 2014, it has been managed by Paul Niven, aiming to generate long-term growth in capital and income from a very broad portfolio of primarily listed global equities, although c 7.5% is invested in private equity.
The manager is benchmark aware, but takes active positions versus the index allocations. FRCL has a progressive dividend policy; the board has proposed another annual dividend increase for FY17, which will be the 47th consecutive year. The trust’s NAV has outperformed its benchmark over one, three and 10 years, while performing broadly in line over five years.
Investment strategy: Focus on capital and income
Niven structures FRCL’s broad portfolio based on his views about asset allocation, risk and the use of gearing. The fund adopts a variety of strategies using both internal and external managers, along with an allocation to private equity, which means that FRCL has thousands of underlying investments. On a geographic basis, the largest deviations versus the benchmark are overweight exposures to Europe ex-UK and emerging markets, and a meaningful underweight exposure to the US. Gearing of up to 20% of NAV is permitted; it was 7.0% at end-July 2016.
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