Profile: F&C Global Smaller Companies (FCS)
Managed by Peter Ewins since August 2005, the trust draws on other experience from around parent company BMO Global Asset Management (formerly F&C). Sam Cosh manages the European portfolio, for example, while Nish Patel manages the US portfolio. Mr Ewins manages the overall shape and allocation of the trust.
[The trust invests in in single companies and other investment funds. The largest weights in the portfolio are all other smaller company investment trusts – Eastspring Investments Japanese Smaller Companies, for example, or Manulife Global Asian Smaller Companies. For the most part, the trust sticks to mainstream markets, such as the US (at 42% of the portfolio), the UK (26%) and Continental Europe (11%).
Mr Ewins says: “Smaller companies generally offer stronger growth potential and are often run by dynamic individuals. Equally, they are not well researched. We invest in less well-known companies much lower down the size bracket. Large companies have lots of people looking at them and it’s more difficult to find bargains. We’re looking for the best companies around the world that can deliver growth in new and emerging segments of the economy.”
Unusually for a smaller companies trust, the trust has also paid a consistent and growing dividend. Although relatively low in absolute terms at just under 1%, the dividend has increased for 46 years in a row.
If you own shares in a company, you’re entitled to a slice of the profits and these are paid as dividends on top of any capital growth in the shares’ value. The amount of the dividend is down to the board of directors (who can decide not to pay a dividend and reinvest any profits in the company) and they will be paid twice yearly (announced at the AGM and six months later as an interim). Dividends are always declared as a sum of money rather than a percentage of the share’s price. Although dividends automatically receive a 10% tax credit from HM Revenue & Customs (HMRC), which takes the company having already paid corporation tax on its profits into account. Dividends are classed as income and, as such, are liable for personal taxation and so shareholders have to declare them to HMRC.