In times of market strife it can pay to use the services of a highly experienced investment professional. Having been through 150 years of market ups and down, investment trust Foreign & Colonial (FRCL) should certainly know how to navigate current choppy market conditions.

It has a stellar track record and offers truly diversified global exposure with around 95% of the portfolio made up of overseas investments. The investment trust has achieved 10.3% annualised return over the past decade.

Its portfolio includes exposure to private equity which has a track record of beating listed equity over the long term. Its longevity should also help it to place current challenges, like the threat of a trade war between the US and China, into perspective.

The fund invests more than £3.5bn in several different strategies either internally at investment group F&C Management or through third parties. It has around 500 different underlying holdings either directly or indirectly. This diversity should help it smooth out the ups and downs of the market.

It targets three main types of investment:

• Shares in well-established companies on major stock markets

• Rising stars in developing economies

• Less-liquid investments including private equity

FINDING THE RIGHT BLEND

Foreign & Colonial is managed by Paul Niven who became only the third manager to take the helm over the past four decades in 2014.

In truth Foreign & Colonial is a multi-manager fund; its US fund is managed by the likes of T Rowe Price, for example, and the private equity component by Pantheon and HarbourVest. Niven helps to find the right blend between different strategies.

Established in 1868 the trust, which wants to change its name to F&C Investment Trust, has increased its dividend every year since 1971. It currently offers an annual yield of 2% and pays dividends quarterly.

In common with other investment trusts, Foreign & Colonial can and does borrow to enhance returns. The maximum gearing rate is 20% and it stood at 7% at the end of February 2018.

Performance has regularly come in ahead of its benchmark, the FTSE All-World total return index, with double-digit returns achieved in four of the last five calendar years.

The shares have traded in a 5.9% to 9.2% average discount to net asset value range over the last one, three, five and 10 years, according to research group Edison. The current discount to NAV stands at 3%. (TS)

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