F&C (FCIT) managed to keep up with the FTSE All-World index in the first half of the year despite being underweight to soaring semiconductor and memory-related stocks. The £6.2bn FTSE 100-listed investment trust, the UK’s oldest, made a 12.4% total investment return in the six months to 30 June, just behind the benchmark’s 12.6%, although shareholders received a 12.8% total return with dividends included as the share price discount narrowed from 6.8% to 6.6%, half-year results showed.
Capital expenditure on artificial intelligence (AI) remained the dominant theme, said chair Beatrice Hollond, who has stood down after nine years on the board. She is replaced by James Williams, who also chairs European Smaller Companies Trust (ESCT) and previously led the board of Schroder Asia Pacific (SDP).
“Despite spectacular gains in numerous semiconductor companies, in many instances current ratings have not increased materially. This reflects the significant uplift in earnings expectations which has driven these stocks, and wider markets, thus far in 2026. Indeed, the magnitude of the increase in earnings expectations is of a level rarely seen outside of a recovery from a recession and does, therefore, reflect the unprecedented spending planned to drive the build out of AI-related infrastructure,” said Hollond.
Notwithstanding the AI boom, US equities continued to lag the rest of the portfolio with emerging markets providing the strongest returns and Japan also a “standout performer” despite the historic weakness of the yen and an interest rate hike from the Bank of Japan.
A first interim dividend of 0.99p per share paid today is an increase on the 0.95p paid in the first three quarterly dividends last year and signals F&C’s intent to top the 4.15p pay-out in 2025 for a 56th consecutive annual rise. F&C adjusted this figures after the four-for-one share split that it proposed in March and implemented in May.
After a 5% fall last month, FCIT shares have delivered a 68% total return over five years, behind the 77% of the FTSE All World. They yield 1.3%.
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