Longevity
According to the AIC, while there have been difficult times (the split capital crisis in 2002 springs most immediately to mind), 150 years of history demonstrates the strength and durability of the investment company structure.
Commenting on the milestone, Simon Fraser, chairman of the Foreign & Colonial Investment Trust, says: “The trust was established 150 years ago with the purpose of bringing the advantages of a pooled approach to investing to the investor of ‘moderate means’ and its objective is as true today as it was on the first day it was founded.
“The key to the trust’s success, having paid a dividend to shareholders in every year of its history and having increased dividends for 46 consecutive years, is that it has never stood still. It has continued to successfully evolve to ensure it remains relevant for investors of today.
“The development of Foreign & Colonial Investment Trust was truly innovative and has helped shape the investment industry today. Since its launch the closed-ended funds universe has grown substantially, with investment trusts now recognised as an ideal structure for those looking to make long-term investments.”
John Newlands, expert on investment companies and their history, adds: “For any company to have traded, survived and grown for 150 years is a rare and indeed a stunning achievement, especially when the financial sector is sometimes accused of short-term thinking. In the case of Foreign & Colonial, the founders were determined to build in prudence, diligence and diversification from the start – in short, to give what was then a troubled and risky financial sector a good name.
“Those founding principles have been maintained ever since, in my view for one particular reason. The presence of a truly independent board of directors, which many other types of fund lack, has maintained shareholders’ interests at every stage in history. That is why all top-class investment companies, and not just Foreign & Colonial, remain just as potentially valid for private investors in 2018 as the original trust did in 1868.”
