The company’s total dividend for 2015 was set at 9.6 pence per share, a 3.2% increase on 2014.
“Asset allocation also added value for shareholders during the year,” said Simon Fraser, chairman. “The Japan portfolio gained 22% over the year, private equity returned 13.9%, and the North American portfolio delivered returns of 10.6%, followed by Europe ex-UK which gained 9%. Emerging market equities were the worst performer, falling 7.4%.”
“Returns came from good stock selection across a broad number of underlying strategies and strong performance from the private equity portfolio, where high levels of cashflow boosted returns,” added Fraser. “While the economic outlook remains uncertain, and we may well see some pressure on certain dividend payers within the portfolio, the board is planning another dividend increase ahead of inflation for 2016.”
Paul Niven, fund manager of Foreign & Colonial Investment Trust, said: “Beyond the macroeconomic issues, corporate earnings remain critical. There has been little growth in underlying earnings for some time now and, therefore, selectivity in stock selection is required. That said, while fundamentals on large swathes of the equity market have been deteriorating, valuations in some areas have been improving.”
“Performance over the past year has been good and the trust remains a solid option for investors seeking a diversified, core global fund,” said Richard Troue, head of investment analysis at Hargreaves Lansdown.
“Exposure to the UK has been reduced and stood at just less than 8% at the end of December,” Troue continued. “During the course of the year exposure to the shares of US, European and Japanese companies was positive for performance. Exposure to emerging markets detracted, but this portion of the portfolio held up well when compared with the broad emerging market index.”
Troue noted that a differentiating feature of Foreign & Colonial is exposure to private equity – 9.5% of the portfolio at the end of December 2015. “This area performed well over the year and generated a return of 13.9%. Exposure to private equity has fallen in recent years but the manager intends to invest more in this area in the coming years,” he said.
