The new manager of the Foreign & Colonial investment trust Paul Niven says he plans to discuss a series of changes with the board which could see the company use derivatives for the first time.
Veteran investor Jeremy Tigue announced his retirement from the trust at the start of March 2014 after nearly 17 years at the helm of the trust. He will leave in July.
He is set to be replaced by Niven, who is currently chair of the trust’s asset allocation committee at F&C Asset Management.
Niven says he will put forward a case to the board for using derivatives on the trust for the first time.
He says: “We are going to be discussing with the board the use of derivatives, but I certainly think it would be advantageous to have access to derivative strategies as a starting point.”
Niven says any use of derivatives will be communicated and explained clearly to shareholders.
He adds: “While we may end up doing some more complex transactions – one example of that might be using derivatives – where the trust hasn’t previously taken advantage of that opportunity set historically, we need to ensure that we communicate this in a very simple way to investors going forwards.”
Thomas and Thomas Financial Services managing director Darren Lloyd Thomas says: “I think derivatives are an ideal call and an overall good fit within an investment trust setting because they are able to hedge downward risk.”