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F&C Managed Portfolio Trust returns 17.9 per cent on income shares


F&C Managed Portfolio Trust, an investment trust of investment trusts, has reported a net asset value total return for the six months to 30 November 2009 of 17.9 per cent on the income shares and 15.7 per cent on the growth shares.

The total return on the FTSE All-Share Index over the same period was 19.7 per cent.

The total return for the investment company sector (measured by the FTSE Equity Investment Instruments Index) was 14.8 per cent, meaning both share classes outperformed the broad investment trust universe.

The dividend yield of the income shares was 5.4 per cent at 30 November, compared with a yield on the FTSE All-Share of 3.3 per cent.

The income shares pay dividends four times a year, in October, January, April and July. The board has stated its intention to declare three interim dividends of 1p each in the current financial year, and hopes to be able to maintain last year’s total annualised dividend of 4.4p per income share.

F&C Managed Portfolio Trust says that in spite of a continued difficult outlook for company dividends, the company’s holdings are well placed because of the ability of investment trusts to hold revenue reserves. For example, the simple average of the revenue reserves of the income portfolio’s top 20 holdings amounts to 1.4 times the estimated cost of their annual dividend payouts.

Within the portfolios, particularly strong performance came from holdings invested in corporate bonds, property, emerging markets and commodities.

F&C Managed Portfolio Trust aims to keep its discount to net asset value below five per cent by operating a programme of share buybacks where necessary. Over the six months to 30 November 2009 the average discount on the income shares was one per cent and on the growth shares was two per cent.
Chairman Richard Martin says: “It seems likely that the UK will emerge from recession in 2010; however, the strength of the recovery is likely to be modest and weaker than that of most other major developed countries. Accordingly the company maintains substantial overseas exposure, at least 40 per cent for the income portfolio and approximately 60 per cent for the growth portfolio.”

F&C Managed Portfolio Trust is managed by Peter Hewitt (pictured) at F&C Investments in Edinburgh. Although conventionally structured, the company has two portfolios: one for income and one for growth. Any income generated by holdings in the growth portfolio is transferred to the income portfolio, with an equivalent amount of capital return transferred back from the income portfolio to the growth portfolio.

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