F & C Investments

F&C UK High Income Trust plc

  • A relatively conservative investment profile

  • How to Invest

    Open an F&C Savings Plan

    Call: 0800 136 420

    Invest online now

    The value of your investments can go down as well as up, and you may not get back what you originally invested.

  • Key facts

    • F&C UK High Income Trust plc aims to provide shareholders with an attractive level of income together with the opportunity for Trust growth.
    • The Trust invests predominantly in UK equities and equity-related securities of companies across the market capitalisation spectrum.
    • The trust has two classes of share - Ordinary shares and B shares - which pay the same level of quarterly cash distributions. The cash distributions on the Ordinary shares are paid as dividends while those on the B shares are paid by way of capital distributions and therefore taxed under capital gains tax (CGT) rules which can provide tax benefits to certain types of investors. The net asset value attributable to each class of shares is the same.
    • The shares may also be traded as units. Each unit consists of three Ordinary shares and one B share.
  • Fund manager commentary

    During the month we nearly completed the exit from the bond portfolio which we have been winding down in an orderly fashion. Less than 1% of the Net Asset Value remains and this will redeem in due course.

    We have had a resolute earnings season to date which is as much about those we own as those we don’t. The market is in no mood for companies missing their numbers and the sell-off resulting from any disappointment being significantly more extreme than the actual profit downgrades. This should serve as a reminder of the valuation risk that is out there and that a derating (in the share price) can be swift when growth slows.

    We exited a further two positions in October. We sold Barclays early in the month prior to another weak set of results. I lacked conviction in the investment case after further analysis and felt the turnaround strategy wasn’t playing out as expected. This decision was all the easier given the lack of yield, despite the view that you’re going to get dividend growth in the future. In my mind that was only ever going to happen in tandem with other improvements in the business – and to date, we are yet to see any real evidence of progress being made.

    The second sale was Vodafone which has always flattered to deceive, in my opinion. Over the last decade this has delivered a negative capital return which is testament to the lack of delivery despite all the changes and promises. Granted, it has outperformed the index on a total-return basis over that period with the attractive yield enhancing returns. I’m sure many will disagree with me but the capital return on offer doesn’t strike me as a quality business and I feel if anything the moat (competitive advantage) is deteriorating not improving, despite the capital investment.

    We used the proceeds of these sales to add to a number of positions on weakness including Pennon and Greencore Group. Having exited Barclays we put some of that money back into Prudential as we wanted to build the size of that position.

    As at 31 October 2017

  • Suitability for retail distribution

    The Company is an investment trust and therefore its shares are not subject to the Financial Conduct Authority's rules relating to the restrictions on the retail distribution of unregulated collective investment schemes and close substitutes which came into effect on 1 January 2014. The Company conducts its affairs so that its shares can be recommended by Financial Advisers to ordinary retail investors in accordance with the Financial Conduct Authority's rules relating to non-mainstream investment products and intends to continue to do so.

  • Fund facts
    Investment manager F&C Investment Business Limited
    Benchmark FTSE All-Share Capped 5% Index
    AIC sector UK Equity & Bond Income
    Launch date 1 March 2007
    Total assets £141.0 million (as at 31.10.17)
    Currency Sterling
    ISIN (Units) GB00B1N4H933
    (Ordinary Shares) GB00B1N4G299
    (B Shares) GB00B1N4H594
    SEDOL (Units) B1N4H93
    (Ordinary Shares) B1N4G29
    (B Shares) B1N4H59
    Key dates
    Annual general meeting June
    Year end 31 March
    Dividend payment date(s) August, November, February and May
    Ex-dividend date(s) July, October, January and April
  • Past performance is not a guide to future results. The value of investments can go down as well as up.

    The shares of the Company are listed on the London Stock Exchange. Information in this section of the website concerning the Company is directed solely at persons who are located in the UK. Nothing on this website is, or is intended to be, an offer, advice, or an invitation, to buy or sell any investments. Potential investors must read our full terms and conditions before proceeding further with any investment product referred to on this website. The information on this website may not be suitable for everyone, and retail investors unsure whether an investment product referenced on this website will meet their individual needs should seek advice before proceeding further with such product.