Diversification sounds easy enough, but putting it into practice can be a different story. Thorough research is needed to balance your portfolio to your preferences. And as the range of your investments grow, so too does the effort of tracking their performance.

If diversification sounds appealing, but the effort involved doesn’t, choosing to invest in an Investment Trust could be the answer.

While they’ve been popular with investors seeking long-term growth for over 150 years, the ins-and-outs of investment trusts can still be unfamiliar to a surprising number of people. If you happen to be one of them, it’s never too late to brush up on your knowledge and see if an investment trust like F&C could be right for you.

A simple way to spread your investments

An investment trust is structured as a publicly listed company, so investing in one is just the same as buying shares in any other company on the stock market. But in the case of an investment trust, the company does just one thing: it aims to make money for its shareholders by investing in other companies.

Choosing an investment trust that offers a carefully selected portfolio of equities could be a simple way to diversify your portfolio.

Which investment trust is right for me?

The investment approach and track record of a trust can tell you a lot about whether it’s the right fit for you.

While everyone’s circumstances are different, long-term capital growth and a steady income are appealing prospects for those seeking a solid foundation on which to grow their wealth. If this sounds like you, F&C Investment Trust could be a smart choice.

A long-term outlook could pay dividends

Investment trusts are close-ended funds, meaning they issue a fixed number of shares at launch. This allows the trust’s management team to buy and sell assets when the time is right, based on long-term strategy rather than the push and pull of short-term market demand.

Investment trusts can also hold back up to 15% of their net income every year to maintain dividend payments to investors – even when market conditions are unfavourable.

In the past 50 years, the world has navigated booms and busts including the dot.com bubble, the global financial crisis and Covid-19. F&C is one of only a handful of investment trusts that have delivered increasing dividends over that time. While no one can guarantee that dividends will continue to grow in the future, a track record like this can be appealing to investors seeking reliable income.

Strength through diversification

Investment trusts can provide readymade access to a diverse portfolio of assets, but each trust will have a different objective.

Some may focus on specific sectors, others on geographies. Then there are investment trusts like F&C, which aim to deliver for the long term. This means the companies it invests in are carefully chosen for their potential to deliver capital and income growth over the long term, while also helping its investors manage market volatility.

F&C invests in around 400 companies worldwide, with financial services, technology and healthcare among the biggest sector weightings. The US, Japan and the UK represent the largest geographic focus.

The portfolio includes household names with solid underlying fundamentals, like Unilever and GlaxoSmithKline, along with rising stars like Amazon and Tesla. F&C also taps into the growth prospects of emerging markets, including China and Latin America.

For those who value steady returns and a diversified portfolio, an approach like F&C’s could provide the best of both worlds.

After navigating through 150 years of market ups and downs, in today’s economic climate, their experience could be the well-managed foundation your portfolio needs.

Key risks

Capital is at risk and there is no guarantee that investors get back the amount invested.

The value of investments and the income received from them can fall as well as rise as markets fluctuate. 

There is no guarantee that F&C dividends will continue to grow in the future.

Approved for distribution 06/10/23 by Columbia Threadneedle Management Limited. Authorised and regulated in the UK by the Financial Conduct Authority.