Foreign & Colonial
This is the world’s first investment trust, launched in 1868. A diversified portfolio gives exposure to most of the world markets and invests in more than 500 companies across 35 countries. The objective of the trust is to secure long-term growth in capital and income through a policy of investing primarily in an internationally diversified portfolio of publicly listed equities, as well as unlisted securities and private equity. The approach is suitable for retail investors in the UK and is designed for investors seeking growth in capital and income from global equity markets. The fund charges a total expense ratio of 0.52% per year.
Reserves, Dividends & Cover
The dividends per share have continued to increase over the last 10 years showing strong growth above RPI inflation. The total increase was 102.79% (6.64% annualized). The revenue reserves have not been increased at the same rate as the dividends with an increase of 14.37% (1.23% annualized), the reserve as a percentage of the dividends has reduced. The reserve cover started at a high level of 2.93 years, which is higher than the majority of ITs. Over the period, the company has paid out cash reserves to maintain dividend increases, which has reduced the reserves from 2.93 to 1.65. The 10 year change in revenue reserves is -3.14% p.a. versus RPI at 1.92% p.a.