In spite of a period of underperformance, analysts are backing the Foreign & Colonial Investment Trust (FRCL) as its new manager Paul Niven takes the reins.
The trust’s interim results for the six months to June 30 showed that the £2.6bn global trust delivered a net asset value (NAV) total return of 1.1 per cent, underperforming the 3.2 per cent achieved by its benchmark, the FTSE All-World Index.
Stock selection was the key negative contributor to returns, with European equities performing particularly badly, falling 4 per cent short of the benchmark.
But Winterflood Investment Trusts research analyst Simon Elliot said: “In spite of its poor performance for the year to date, FRCL showed strong figures for 2013 and has outperformed over the longer term.”
In the past five years, to July 31, the FTSE 250 listed vehicle has achieved a total return of 81 per cent, just ahead of the FTSE All-World Index’s 78 per cent for the term.
Paul Niven took over the running of the trust on July 1 from its longstanding manager, Jeremy Tigue, who recently retired after running the vehicle for almost 17 years.
Presently more than 50 per cent of the fund is externally managed and Mr Elliot believes its recent revamp, which saw it adopt “a truly global benchmark” in 2013, was a positive development.
He said: “It is evidently likely to continue its evolution under Paul Niven’s stewardship, although the aim is for it to remain a well-diversified, equity-focused core growth portfolio.
“The fund benefits from a largely retail shareholder register and, given its size, secondary market liquidity in its shares is good.
“In our view, FRCL remains an attractive long-term, low-cost savings vehicle.”
