F&C UK Select Trust
Objectives and Investment Policy
The investment objective of the Company is to achieve capital growth for ordinary shareholders by investing in a portfolio of UK equities with the potential for above average capital growth.
The performance of the Company is measured against the total return on the FTSE All-Share Index.
The Company seeks to achieve capital growth through a concentrated portfolio containing 25 high conviction ideas, with the individual positions being broadly equally weighted (the initial weighting for a holding will be 4 per cent of the total portfolio and, thereafter, it will be maintained at between 3-5 per cent). A strict rebalancing range will be enforced, meaning that positions will be trimmed back or sold to lock in profits or topped up or sold when they are underperforming.
The Company invests principally in the securities of companies quoted on the London Stock Exchange (but without restricting the Company from investing in companies quoted or traded on other exchanges or markets including AiM).
The Company’s investment policy will be flexible, enabling it to invest in any market sector; large, mid and small capitalisation companies; and all types of securities issued by corporates, including (but not limited to) equities, preference shares, debt, convertible securities, warrants and other equity related securities.
The Company may invest in closed-end funds that are traded on the London Stock Exchange but it will not invest more than 10 per cent, in aggregate, of the value of its gross assets at the time the investment is made in other investment trusts or investment companies admitted to the Official List.
It would not normally invest in unlisted securities (with the exception of securities which are about to be listed or traded on a stock exchange). However, the Company may continue to hold securities that cease to be traded if the Managers consider this to be appropriate.
The Company may also invest in derivatives, financial instruments, money market instruments and currencies for the purpose of efficient portfolio management.
It is intended that the positions held by the Company will generally be individual equities, but at times up to a maximum of five of the Company’s positions may be of the other instruments described above (including cash and money market instruments).
The Company will utilise borrowings when deemed appropriate for investment purposes, subject to a maximum borrowings level of 20 per cent of net assets measured at the time of drawdown.
An explanation of how the Company has invested its assets with a view to spreading investment risk in accordance with the investment policy is contained under the heading Management of Assets and Shareholder Value in the latest Annual Report and Accounts.