F&C Investment Trust reports an NAV return for 2022 of -5.3% and a return to shareholders of -0.9%. The trust benchmarks itself to the FTSE All World Index which it says returned -7.7%. The trust moved into the FTSE100 Index during the year.
The full-year dividend was 13.5p, 5.5% higher than the previous year and this marked the 52nd year of consecutive annual dividend increases. The dividend was covered by revenue of 13.9p per share.
An analysis of performance reveals that the portfolio actually marginally underperformed its benchmark, returning -7.9%, but a positive change in the fair value of the trust’s debt (as interest rates rose) drove most of the outperformance (contributing +4.2% to returns). At the end of 2022, outstanding debt was £581.3m at a blended borrowing rate of less than 2.4%. This was offset by £244m in cash and cash equivalents, leading to an effective gearing level (with debt at par value) of 7.3%.
A breakdown of performance by geography reveals that the trust’s investments in Japan, Europe and emerging markets all underperformed local benchmarks. The standout positive contribution came from the trust’s private equity exposure, which was 12.3% of the portfolio at the year end and returned +3.6% over 2022.
FCIT : F&C positive returns driven by falls in the vaue of its debt