The Mail on Sunday
Emerging markets lift F&C
VERY old (it was founded in 1868) and not very fashionable (unlike new funds, it is not aggressively marketed), the giant Foreign and Colonial Investment Trust continues to deliver value and growth to shareholders.
The £2.3 billion trust’s 2009 results, published last month, show that the portfolio benefited from the huge rally in global markets that began a year ago. FCIT’s assets grew 21 per cent in 2009, helped largely by its big exposure to emerging markets, where the rebound was strongest.
Performance was dulled by the trust’s 15 per cent private equity holdings. These remained out of favour during 2009, reflected in low valuations that turned upward only in the last quarter, says fund manager Jeremy Tigue. He expects the value of these holdings to continue rising through every quarter of 2010.
Most of FCIT’s global assets are run by Foreign & Colonial Management itself, but chunks are outsourced to other managers. The private equity holdings, for example, are structured through a number of funds and equate to investments in about 10,000 underlying businesses. The US portion of the fund – 21 per cent – is also run externally, as were the Japanese holdings until Tigue took them back in-house from Goldman Sachs Asset Management in December.
FCIT increased its dividend for the 39th year, dipping into reserves to do so. These remain healthy.
The fund has decreased its exposure to Britain over the years. A third of holdings are listed in London, but most of these businesses are international. Just ten per cent of the portfolio is exposed to Britain in terms of revenues.