Investors who hold F&C Global Smaller Companies will be pleased to hear the investment trust has today announced its 47th consecutive dividend increase.
In its full year results posted today, the trust, which is a Moneywise First 50 Fund, has confirmed a total dividend for the year of 12.25p per share – up 14.5% compared to the previous year – and the sixth successive year of double-digit percentage dividend increases. This equates to a net dividend of 0.91%. The final dividend will be paid on 11 August 2017 to shareholders on the register on 14 July 2017.
F&C Global Smaller Companies’ share price ended the year to the end of April 2017 at 1273p – a total return of 28.5%.
The trust has however underperformed against its benchmark – a blended index of the MSCI All Country World ex UK Small Cap Index and Numis UK Smaller Companies (excluding investment companies) Index – which produced a total return of 30.4% over the period.
F&C Global Smaller Companies, which launched in 1889 and has been managed by Peter Ewins since 2005, invests in smaller companies on a global basis with its largest weighting (40.3%) in North America. Its annual report states that US small caps “led performance”, with stocks “lifted by hopes of tax reform and increased spending on infrastructure projects under the new Trump administration”, although the company’s portfolio in this market lagged the local index.
The European portfolio also underperformed, but investments in the UK, Japan and Asia beat their relevant indexes.
Looking ahead, Mr Ewins says: “Most forecasts for the global economy are showing a higher rate of growth in 2017 than 2016. Central banks may start to reduce their support for markets after a number of years of asset accumulation. This could place some pressure on market valuations, although we believe that the earnings outlook should remain supportive for our holdings in the year ahead.”
Thank you for your comment.
Fund manager, Peter Ewins, has responded as below:
“The dividend yield is 0.91% based on the 12.25p dividend per share divided by the share price of £13.40. Different tax payers will be liable to different tax rates on the dividend depending on their individual circumstances, so a higher rate tax payer would not receive a net 0.91% whereas a non-taxpayer would. The dividend of 12.25p was up 14.5% on the previous year’s 10.7p.”