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Over the month, the Company’s net asset value total return was 5.1% and this compares with the return from the FTSE All-Share 5% Capped Index return of 4.9%.
During the past two months, there was a substantial reduction in assets allocated to the higher yield portfolio in light of the low level of yields available on corporate bonds, particularly on higher quality, investment grade corporate bonds. As at the end of December, the higher yield portfolio accounted for just 2.2% of the Company’s total assets. With global economic growth expectations improving and inflation expectations rising we expect to see upwards pressure on both government bond yields and to a lesser extent investment grade credit yields. The proceeds raised from the reduction in the Company’s corporate bond exposure was reinvested across a wide range of existing holdings in the equities portfolio.
Equity markets performed well over the month with the UK market closing the year at an all-time high as concerns over the potential impact of the UK’s decision to leave the European Union receded. In fact, the UK market has benefitted significantly from the effect of the devaluation of sterling on its predominantly international earnings base. In the United States, markets were buoyed by the improvement in macroeconomic backdrop and the expansionary pro-business rhetoric from the incoming US administration.
As at 31 December 2016
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.
Share price (A Shares)
Share price (B Shares)
Share price (Units)
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.
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F&C Group. The F&C Group is wholly owned by BMO Global Asset
Management (Europe) Limited, which is itself a wholly owned subsidiary of the
Bank of Montreal.