F&C Investment Trust cautiously optimistic on 2019 – F&C Investment Trust (FCIT) has published its annual report for the year to 31 December 2018. Shareholder total returns were down 0.6% in what the fund described as “the most challenging year since the global finance crisis”, though they outperformed on a relative basis compared to the 3.4% decline in the benchmark FTSE all-world index. FCIT predominantly invests in developed market equities, with North America accounting for 53% of the portfolio.
Key highlights from 2018
- NAV total return of -3.3% year-on-year (y-o-y) and a 5.8% increase in the annual dividend per share to £11p. The current net dividend yield is 1.7%
- FCIT’s discount to NAV closed the year at 1.5%, which was its narrowest level for more than 20 years. The shares are now trading at a 1.66% premium, continuing an upward trend that kicked in in early 2017. We note that the fund’s fees continued to decrease, as total costs ratio fell from 1.06% to 1.01% for 2018 while ongoing charges figure, which is more forward looking, declined from 0.79% to 0.65%. Declining fees and a strong performance over recent years have helped push the fund’s shares into premium territory
In a note published this month, FCIT’s manager, Paul Niven, discussed the outlook for the rest of the year: “Despite the recent recovery, we continue to believe that sharp falls in many stocks have improved valuation metrics in a number of areas and, providing that growth remains on a positive path globally, 2019 may see better returns than the year just past. Nonetheless, the cycle is mature and the bull market in stocks is extended, with outlooks for global growth in 2019 starting to taper. We expect that volatility will remain heightened in coming quarters and we continue to invest in a range of diversified underlying stock selection strategies. We remain well placed to withstand short-term volatility in markets.”
FCIT top ten holdings (%) at February 28, 2019
| Amazon | 2.0 | |||||
| Microsoft | 1.8 | |||||
| PE Investment Holdings 2018 LP | 1.7 | |||||
| Alphabet | 1.3 | |||||
| Anthem | 1.2 | |||||
| UnitedHealth | 1.1 | |||||
| Boeing | 1.1 | |||||
| 1.0 | ||||||
| Comcast | 0.8 | |||||
| Pfizer | 0.8 |
FCIT: F&C Investment Trust cautiously optimistic on 2019