Active managers who blame their recent underperformance on unforeseen circumstances – namely Russia’s invasion of Ukraine and inflation – conveniently forget that while nobody expected a war, sky-high valuations on growth stocks were a warning sign that something had to give. F&C Investment Trust (FCIT) made that call when it mattered. It cut down on pricey big-name stocks ahead of its peers, reaped the benefits last year, and looks well positioned to keep up with the challenges of 2023.
- Diversified global focus
- Knows when to sell
- Outperformed peers in 2022
- Long history of dividend growth
- Somewhat bearish outlook
- PE exposure could hurt NAV
Manager Paul Niven says the trust started reducing its exposure to large-cap US growth stocks in the second half of 2020, on the basis that valuations had become stretched, and did so again in early 2022. Facebook-owner Meta Platforms (US:META), which went from being the trust’s fifth holding in December 2021 to being left out of the top 100 one year later, is a notable example of this shift.