F&C has made a number of changes to Jeremy Tigue’s Foreign & Colonial investment trust, including a new benchmark and the creation of two sub-portfolios.
The asset manager says the moves, which have led to a significant shift in the portfolio’s UK weighting, are designed to let the £2.4bn trust exploit new investment opportunities, increase global exposure and diversify its sources of income.
The investment company is now benchmarked against the FTSE All World Index. Before 1 January 2013, it used a composite of 40 per cent FTSE All Share and 60 per cent FTSE World ex UK. F&C says the new benchmark is “simpler, clearer and better reflects the global nature of the company’s overall investment portfolio”.
A new global income sub-portfolio, which is valued at £150m or 6 per cent of the investment portfolio, has been created. This is made up of 200 stocks, has a dividend yield of 4.7 per cent and has been funded from sales in the UK.
In addition, ten of the trust’s existing holdings have been moved into a global funds sub-portfolio, which is valued at £110m or 4.3 per cent of the overall investment portfolio. This sub-portfolio will be used to invest in specialist areas across the globe.
Because of these changes, the trust’s UK allocation has dropped from 33.7 per cent at the end of 2012 to 22 per cent at the start of February.
Foreign & Colonial chairman Simon Fraser says: “Through increasing our global exposure, the benchmark and portfolio changes will build on our record of long-term income and capital growth.
“In 2012 we outperformed both the old and new benchmarks and increased the dividend by 20 per cent. We are confident these changes will ensure we continue to deliver growth in income and capital for our shareholders.”