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Celebrating 10 years since launch

F&C Managed Portfolio Trust 21 May 2018 Review
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F&C Managed Portfolio Trust

Celebrating 10 years since launch

Investment trusts

 

21 May 2018

FMPI; FMPG

Price

141.0p; 209.0p

Market cap

£61m; £74m

AUM

£63m; £72m

NAV*

133.7p; 205.8p

Premium(+)/discount(-) to NAV

+5.4%; +1.6%

NAV**

136.9p; 205.8p

Premium(+)/discount(-) to NAV

+3.0%; +1.6%

*Excluding income. **Including income. As at 17 May 2018.

Yield

4.0%; 0.0%

Ordinary shares in issue

43.1m; 35.2m

Code

FMPI; FMPG

Primary exchange

LSE

AIC sector

Flexible Investment

Benchmark

FTSE All-Share

FMPI one-year performance

FMPG one-year performance

FMPI gearing

Net gearing*

3.6%

FMPG gearing

Net cash*

4.4%

*As at 30 April 2018.

Analysts

Mel Jenner

+44 (0)20 3077 5720

Sarah Godfrey

+44 (0)20 3681 2519

F&C Managed Portfolio Trust is a research client of Edison Investment Research Limited

F&C Managed Portfolio Trust (FMPT) has a differentiated structure comprising two listed portfolios: income (FMPI) and growth (FMPG). The trust is celebrating its 10th anniversary, and both portfolios have outperformed the benchmark FTSE All-Share index over three and 10 years, while FMPG has also outperformed over one and five years. Any income generated by FMPG is transferred to FMPI in exchange for an equal amount of capital, boosting their respective capital growth and income prospects. FMPI and FMPG have recently changed their Association of Investment Companies (AIC) classifications from the Global Equity Income and Global sectors respectively, to the Flexible Investment sector, which the manager says is a more relevant peer group. FMPI has grown its annual dividend regularly since 2012 and is currently yielding 4.0%.

12 months ending

FMPI share price (%)

FMPI NAV (%)

FMPG share price (%)

FMPG NAV (%)

FTSE All-Share (%)

30/04/14

8.8

6.5

12.4

10.0

10.5

30/04/15

9.2

9.0

11.8

11.4

7.5

30/04/16

(6.3)

(2.9)

(2.6)

(1.8)

(5.7)

30/04/17

26.6

21.7

23.3

22.9

20.1

30/04/18

2.6

4.8

10.1

11.2

8.2

Source: Thomson Datastream. Note: All % on a total return basis in GBP.

Investment strategy: Income and growth portfolios

Since launch, FMPT has been managed by Peter Hewitt, who has 35 years of investment experience. FMPI, which aims to generate an attractive level of income and some capital growth, and FMPG, which aims to generate capital growth, are each invested in c 40 closed-end funds. Investments are selected on a bottom-up basis. While the manager aims for income and capital growth, he is also keen to preserve capital in periods of stock market weakness. Gearing of up to 20% of total assets in each portfolio is permitted. At end-April 2018, FMPI had net gearing of 3.6% and FMPG had a net cash position of 4.4%.

Market outlook: More normal stock market volatility

Stock market volatility was very low in 2017, running at around half the level of the long-term historical average. So far in 2018, volatility has increased due to concerns about higher interest rates, the impact of proposed tariffs on global trade and ongoing geopolitical issues. While corporate earnings growth remains robust, forward P/E equity valuations are above their 10-year averages. Investors seeking global equity exposure may wish to consider a highly diversified fund, with a strong long-term track record, offering a bias towards income or capital growth.

Valuation: Both portfolios trade close to NAV

FMPT’s board aims to ensure that both portfolios trade close to NAV. FMPI and FMPG have the authority, renewed annually, to repurchase up to 14.99% and issue up to 10% of shares. As noted above, FMPG does not pay a dividend, while FMPI benefits from the growth portfolio’s transfer of income in exchange for capital; it currently offers shareholders an above-average 4.0% dividend yield.

Exhibit 1: FMPI at a glance

Investment objective and fund background

Recent developments

F&C Managed Portfolio Trust Income Portfolio (FMPI) aims to provide an attractive level of income, with the potential for income and capital growth from a diversified portfolio of investment companies. Underlying investment exposure is across a range of regions and sectors – the focus is on offering an income yield above the benchmark FTSE All-Share index.

8 March 2018: Announcement of third interim dividend of 1.30p per share versus 1.25p in the prior year.

1 February 2018: Change in AIC classification from Global Equity Income sector to Flexible Investment sector.

26 January 2018: Interim results for six months ending 30 November 2017. NAV TR +2.0% versus benchmark TR -0.2%.

6 December 2017: Announcement of second interim dividend of 1.30p per share versus 1.25p in the prior year.

Forthcoming

Capital structure

Fund details

AGM

September 2018

Ongoing charges

1.12%

Group

BMO Global Asset Mgmt (BMO)

Final results

July 2018

Net gearing

4.1%

Manager

Peter Hewitt

Year end

31 May

Annual mgmt fee

0.65% (see page 9)

Address

6th Floor, Quartermile 4, 7 Nightingale Way Edinburgh, EH3 9EG

Dividend paid

Quarterly

Performance fee

Yes (see page 9)

Launch date

April 2008

Trust life

Indefinite

Phone

+44 (0)131 718 1000

Continuation vote

2018, then five-yearly

Loan facilities

£7m (FMPT)

Website

fcmanagedportfolio.co.uk

Dividend policy and history (financial years)

Share buyback policy and history (financial years)

Dividends are paid quarterly in October, January, April and July.

Renewed annually, the ability to repurchase up to 14.99% and allot up to 10% per year.

Shareholder base (as at 4 May 2018)

Portfolio look-through exposure by geography (as at 30 April 2018)

Top 10 holdings (as at 30 April 2018)

Portfolio weight %

Trust

AIC sector

30 April 2018

30 April 2017*

Murray International Trust

Global Equity Income

3.9

3.4

Law Debenture Corporation

Global

3.6

3.3

Secure Income REIT

Property Specialist

3.4

2.8

Invesco Perpetual UK Smaller Companies

UK Smaller Companies

3.4

3.0

BB Biotech

Sector Specialist: Biotech & Healthcare

3.2

N/A

European Assets Trust

European Smaller Companies

3.2

N/A

JPMorgan Global Growth & Income

Global Equity Income

3.1

N/A

CC Japan Income & Growth Trust

Japan

3.1

N/A

City of London Investment Trust

UK Equity Income

3.1

2.9

Henderson International Income Trust

Global Equity Income

3.1

2.7

Top 10

33.1

29.6

Source: F&C Managed Portfolio Trust, Edison Investment Research, Bloomberg, Morningstar. Note: *N/A where not in April 2017 top 10.

Exhibit 2: FMPG at a glance

Investment objective and fund background

Recent developments

F&C Managed Portfolio Trust Growth Portfolio (FMPG) aims to provide capital growth from a diversified portfolio of investment companies. Underlying investment exposure is across a range of regions and sectors aiming to maximise total returns, primarily through capital growth. FMPG is benchmarked against the FTSE All-Share index.

1 February 2018: Change in AIC classification from Global sector to Flexible Investment sector.

26 January 2018: Interim results for six months ending 30 November 2017. NAV TR +6.3% versus benchmark TR -0.2%.

Forthcoming

Capital structure

Fund details

AGM

September 2018

Ongoing charges

1.08%

Group

BMO Global Asset Mgmt (BMO)

Final results

July 2018

Net cash

3.8%

Manager

Peter Hewitt

Year end

31 May

Annual mgmt fee

0.65% (see page 9)

Address

6th Floor, Quartermile 4, 7 Nightingale Way Edinburgh, EH3 9EG

Dividend paid

None

Performance fee

Yes (see page 9)

Launch date

April 2008

Trust life

Indefinite

Phone

+44 (0)131 718 1000

Continuation vote

2018, then five-yearly

Loan facilities

£7m (FMPT)

Website

fcmanagedportfolio.co.uk

Dividend policy and history

Share buyback policy and history (financial years)

No dividends paid – net income is reallocated to the income portfolio in exchange for capital.

Renewed annually, the ability to repurchase up to 14.99% and allot up to 10% per year.

Shareholder base (as at 2 March 2018)

Portfolio look-through exposure by geography (as at 30 April 2018)

Top 10 holdings (as at 30 April 2018)

Portfolio weight %

Trust

AIC sector

30 April 2018

30 April 2017*

Monks Investment Trust

Global

4.5

3.3

Polar Capital Technology Trust

Sector Specialist: Tech Media & Telecom

3.8

3.6

Allianz Technology Trust

Sector Specialist: Tech Media & Telecom

3.7

3.0

Scottish Mortgage Investment Trust

Global

3.4

3.1

Syncona

Flexible Investment

3.2

2.7

Baillie Gifford Japan Trust

Japan

3.1

2.7

Worldwide Healthcare Trust

Sector Specialist: Biotechnology & Healthcare

2.8

N/A

Hg Capital Trust

Private Equity

2.7

N/A

Jupiter European Opportunities Trust

Europe

2.6

2.7

Mid Wynd International Investment Trust

Global

2.6

2.7

Top 10

32.4

29.0

Source: F&C Managed Portfolio Trust, Edison Investment Research, Bloomberg, Morningstar. Note: *N/A where not in April 2017 top 10.

Market outlook: Return to more normal equity volatility

The sterling performance of both UK and global equities (ex-UK) is shown in Exhibit 3 (left-hand side). Over the last 10 years, overseas equities have significantly outpaced the returns from UK equities. After a particularly benign period during 2017, global stock markets are experiencing much higher levels of volatility so far in 2018, as investors focus on an outlook for higher interest rates, the risk of slowing global trade due to potential US tariffs, and ongoing geopolitical tensions; this environment could continue throughout the year. As witnessed in Q118 company reports and outlook statements, corporate earnings growth remains supportive, although equity valuations for both UK and world equities are generally above their 10-year averages (Exhibit 3, right-hand side). Taking this backdrop into consideration, investors seeking equity exposure may wish to consider a fund with broad global coverage and a long-term focus, which offers the opportunity to emphasise either capital growth or income.

Exhibit 3: Market performance and valuation

Performance of indices over 10 years (£ terms)

Valuation metrics of Datastream indices (18 May 2018)

 

Last

High

Low

10-year average

Last as % of average

UK

P/E 12 months forward (x)

14.0

15.7

7.4

12.2

115

Price to book (x)

1.6

2.4

1.2

1.7

95

Dividend yield (%)

3.6

6.6

2.7

3.5

101

Return on equity (%)

12.7

18.2

2.5

9.8

129

World

P/E 12 months forward (x)

15.0

16.2

8.8

13.2

113

Price to book (x)

2.2

2.4

1.1

1.7

124

Dividend yield (%)

2.4

4.6

2.2

2.7

89

Return on equity (%)

11.7

15.5

4.8

10.7

109

Source: Thomson Datastream, Edison Investment Research

Fund profile: Income and growth portfolios

FMPT was launched on 16 April 2008, and since then has been managed by Peter Hewitt, at F&C (a wholly owned subsidiary of Bank of Montreal). FMPI offers the potential for long-term capital and income growth, while FMPG aims to generate long-term capital growth. The trust has a unique feature – any income generated by FMPG is transferred to FMPI in exchange for an equal amount of capital, thus boosting the income potential for FMPI and the capital growth potential for FMPG. FMPT launched with assets under management of £42m and c 2,000 shareholders; combined assets have grown to c £130m and the trust now has more than 14,000 shareholders. Both FMPI and FMPG offer investors a broad spread of investment companies, diversified by geography, sector and investment managers, which spreads investment risk. They are benchmarked against the FTSE All-Share index and both portfolios have outperformed the benchmark over three and 10 years, while FMPG has also outperformed over one and five years. Each portfolio contains at least 25 investment companies (typically c 40), which are primarily invested in equities. There are no geographic or sector restrictions, but there is a limit of 15% in a single holding, at the time of investment. The manager may invest in other funds managed by the F&C Group, up to a maximum of 20% of total assets in each portfolio. Derivatives are permitted for efficient portfolio management, including protection during periods of stock market weakness. Gearing of up to 20% of total assets is permitted in each portfolio; at end-April 2018, FMPI had net gearing of 3.6% and FMPG had a net cash position of 4.4%. On 1 February 2018, both portfolios changed their AIC classification to the Flexible Investment sector – FMPI from the Global Equity Income sector and FMPG from the Global sector. While FMPT has a unique structure, the manager considers the new peer group more relevant for both portfolios.

The fund manager: Peter Hewitt
The manager’s view: Bullish on outlook for portfolio holdings

While equity valuation multiples have expanded, Hewitt believes that share prices can be supported by robust corporate earnings growth. For the UK in 2018, he expects a modest either positive or negative return rather than a significant rise or fall in the stock market. He notes the tension between the potential for higher interest rates against an environment of strong dividend and earnings growth. The manager believes that sterling looks close to fair value. He suggests that in the near term the currency could strengthen on the back of less uncertainty regarding Brexit negotations, but longer term he believes that overseas equities should generate higher equity returns for a sterling-based investor. Hewitt’s current preferred regions for investment are Asia Pacific and emerging markets; he suggests that while economic and corporate data in Europe are encouraging, the stock market is not fully reflecting this. In aggregate, he considers US equities to be expensive, but there are some sectors of the market experiencing very robust growth, aided by the recent tax reforms. Hence, he is not expecting a bear market in the US, although he believes that a pullback in the stock market is a possibility. Given the positive re-rating of equities, the manager expects the US stock market to be driven by earnings growth rather than by a further uplift in valuation multiples, especially as bond yields and interest rates are rising.

While global stock markets are experiencing higher levels of volatility compared to the below-average levels seen in 2017, Hewitt is continuing to focus on his favoured areas, such as technology and biotech, which he believes have secular growth characteristics. The technology sector has outperformed the broader market, but Hewitt believes that strong earnings growth and share price momentum will continue. He also points to positive fundamentals within the biotech industry, coupled with attractive company valuations, and believes that increased mergers and acquisitions could lead to a positive re-rating in the sector. While the manager takes the macro environment into account, he is keen to stress that all investments are made on a bottom-up basis and he is expecting strong performance from the portfolio’s holdings.

Asset allocation
Investment process: Long-term, bottom-up approach

Hewitt invests for the long term, aiming to grow both capital and income, while protecting capital when stock markets are less buoyant. Both FMPI and FMPG have a number of more defensive positions. The manager adopts a bottom-up focus to stock selection, seeking holdings with an ability to outperform their respective benchmarks as well as the FTSE All-Share index. Meeting investment company managements is a key part of the investment process supplemented by the use of third-party research. Over time, UK exposure has been reduced in both portfolios in favour of overseas equities, which the manager believes offer the potential for better long-term total returns. He also favours sectors with secular growth characteristics, such as technology and biotech.

Current portfolio positioning

FMPI: Monks Investment Trust is a new position in FMPI (already the largest position in FMPG), bought with the proceeds of the large special dividend received from 3i Infrastructure. Hewitt believes Monks offers good global exposure, including a large weighting to the technology sector, offering the prospect of higher capital growth for the income portfolio. Another new holding in FMPI is Assura, which is a specialist property vehicle investing in GP surgeries across the UK. It enters into long-term contracts, a number of which are index-linked and backed by the government. Assura offers a dividend yield of more than 4%, and the annual payout is covered by income and growing at a high single-digit annual rate. Recent sales in FMPI are: City Merchants High Yield Trust and Edinburgh Investment Trust (UK Equity Income sector); Aberdeen Asian Smaller Companies Convertible Loan Stock (Asia Pacific ex-Japan); BlackRock North American Income Trust (North America); and Carador Income (Sector Specialist: Debt).

FMPG: the only new position in FMPG in recent months is Capital Gearing Trust. It is a very defensive fund, aiming to both grow and preserve capital. It has c 40% in equities and positions in preference shares/corporate debt, government bonds, gold and cash. Hewitt believes it is important to have some defensive holdings in the portfolio to offer protection in periods of stock market weakness, particularly given the duration of the stock market rally following the global financial crisis. The manager has also added to defensive positions in Personal Assets Trust and Ruffer Investment Company. Recent sales in FMPG are: Perpetual Income & Growth Trust (UK Equity Income); Sanditon Investment Trust (UK All Companies); Fundsmith Emerging Equities Trust (Global Emerging Markets); and Gabelli Value Plus Trust (North America).

Exhibit 4: FMPI’s and FMPG’s look-through geographic exposure (% unless stated)

FMPI

Portfolio end-April 2018

Portfolio end-April 2017

Change (pts)

FMPG

Portfolio end-April 2018

Portfolio end-April 2017

Change (pts)

UK

37.0

42.0

(5.0)

UK

26.0

28.0

(2.0)

North America

15.0

14.0

1.0

North America

24.0

23.0

1.0

Europe

13.0

11.0

2.0

Europe

18.0

18.0

0.0

Cash

12.0

8.0

4.0

Far East & Pacific

10.0

9.0

1.0

Far East & Pacific

9.0

12.0

(3.0)

Cash

7.0

7.0

0.0

Fixed interest

6.0

8.0

(2.0)

Japan

5.0

5.0

0.0

Japan

3.0

3.0

0.0

Fixed interest

3.0

4.0

(1.0)

China

2.0

1.0

1.0

China

2.0

2.0

0.0

Russia

2.0

0.0

2.0

South America

2.0

1.0

1.0

South America

1.0

1.0

0.0

Other

2.0

2.0

0.0

Africa

1.0

1.0

0.0

100.0

100.0

100.0

100.0

Source: F&C Managed Portfolio Trust Growth Portfolio, Edison Investment Research

Performance: Long-term outperformance

FMPI: in H118 (ending 30 November 2017), FMPI’s NAV and share price total returns of +2.0% and +1.1% respectively were ahead of the benchmark’s -0.2% total return. The best contributors to performance were: BB Biotech (+15%) and CC Japan Income and Growth Trust (+15%), while the largest detractor was Edinburgh Investment Trust (-8%).

Exhibit 5: FMPI’s performance to 30 April 2018

Price, NAV and benchmark total return performance, one-year rebased

Price, NAV and benchmark total return performance (%)

Source: Thomson Datastream, Edison Investment Research. Note: Three-, five- and 10-year performance figures annualised.

FMPI’s relative performance is shown in Exhibit 6. Its NAV total return has outperformed the benchmark over three and 10 years, but has underperformed over one and five years.

Exhibit 6: FMPI’s share price and NAV total return performance, relative to indices (%)

 

One month

Three months

Six months

One year

Three years

Five years

10 years

Price versus FTSE All-Share

(1.7)

(3.0)

(3.4)

(5.1)

(0.7)

(0.7)

13.9

NAV versus FTSE All-Share

(2.9)

(2.9)

(2.7)

(3.1)

1.0

(1.2)

11.7

Price versus FTSE All-Share Eq Invt Instr

1.0

(1.1)

(2.9)

(6.0)

(11.0)

(12.2)

2.2

NAV versus FTSE All-Share Eq Invt Instr

(0.3)

(1.0)

(2.2)

(4.0)

(9.4)

(12.7)

0.2

Source: Thomson Datastream, Edison Investment Research. Note: Data to end-April 2018. Geometric calculation.

Exhibit 7: FMPI’s NAV total return performance relative to benchmark over 10 years

Source: Thomson Datastream, Edison Investment Research

FMPG: in H118 (ending 30 November 2017), FMPI’s NAV and share price total returns of +6.3% and +5.8% respectively were meaningfully ahead of the benchmark’s -0.2% total return. Two of the best contributors to performance were: Baillie Gifford Japan Trust (+27%) and Syncona (+24%), while the largest detractor was Woodford Patient Capital Trust (-9%).

Exhibit 8: FMPG’s performance to 30 April 2018

Price, NAV and benchmark total return performance, one-year rebased

Price, NAV and benchmark total return performance (%)

Source: Thomson Datastream, Edison Investment Research. Note: Three-, five and 10-year performance figures annualised.

FMPG’s relative performance is shown in Exhibit 9. It has outperformed the benchmark over one, three, five and 10 years in both NAV and share price terms.

Exhibit 9: FMPG’s share price and NAV total return performance, relative to indices (%)

 

One month

Three months

Six months

One year

Three years

Five years

10 years

Price versus FTSE All-Share

(3.6)

(1.5)

0.4

1.8

7.9

14.1

8.0

NAV versus FTSE All-Share

(3.0)

(2.4)

(0.7)

2.9

9.5

12.9

5.1

Price versus FTSE All-Share Eq Invt Instr

(1.0)

0.3

0.9

0.9

(3.3)

0.9

(3.1)

NAV versus FTSE All-Share Eq Invt Instr

(0.4)

(0.5)

(0.1)

1.9

(1.9)

(0.2)

(5.6)

Source: Thomson Datastream, Edison Investment Research. Note: Data to end-April 2018. Geometric calculation.

Exhibit 10: FMPG’s NAV performance relative to benchmark over 10 years

Source: Thomson Datastream, Edison Investment Research

Discount: Aiming to trade close to NAV

FMPT’s board aims to ensure that FMPI’s and FMPG’s shares trade close to NAV. FMPI’s current 3.0% share price premium to cum-income NAV compares to the average premiums of the last one, three, five and 10 years of 1.7%, 0.9%, 0.9% and 0.2% respectively.

Exhibit 11: FMPI’s share price premium/discount to NAV (inc. income) over three years (%)

Source: Thomson Datastream, Edison Investment Research

FMPG’s current 1.6% share price premium to cum-income NAV compares to the average premiums of the last one, three and five years of 1.2%, 0.6% and 0.3% respectively and the average 10-year discount of 0.2%.

Exhibit 12: FMPG’s share price premium/discount to NAV over three years (%)

Source: Thomson Datastream, Edison Investment Research

Capital structure and fees

At 14 May 2018, FMPI had 43.1m and FMPG had 35.2m ordinary shares in issue; no shares are currently held in treasury. FMPT has a £5m five-year loan facility at a fixed rate of 2.03% and a £2m two-year unsecured revolving credit facility with Royal Bank of Scotland. Gearing of up to 20% of total assets is permitted in both portfolios; at end-April 2018, FMPI had 3.6% net gearing and FMPG had a 4.4% net cash position.

F&C is paid an annual management fee of 0.650% pa of total assets in each portfolio, reducing to 0.325% pa on any F&C-managed investments held. The management fee is split 60:40 between capital and revenue for FMPI and 80:20 respectively for FMPG. A 10% performance fee is payable on the excess total return of FMPI and FMPG versus the benchmark total return, capped at 0.35% of the total assets of the relevant portfolio. FMPI’s ongoing charge in FY17 was 1.12% (3bp higher versus FY16) while FMPG’s ongoing charge was 1.08% (1bp lower versus FY16).

Annually in October, shareholders have the opportunity to convert their income shares into growth shares and vice versa. This is subject to certain minimum and maximum thresholds; so far there have been no conversions as the minimum limit has not been achieved.

Dividend policy and record

All income accrues to FMPI, with any net revenue generated by FMPG passing to FMPI in exchange for an equal amount of capital. FMPI pays dividends four times a year, in October, January, April and July. The 5.45p FY17 total dividend was an increase of 4.8% compared with the FY16 distribution; this is above the five-year annual compound growth rate of 3.9%. In line with FY16, the FY17 dividend was 1.08x covered by income. At the end of H118, the revenue reserve was c £1.4m, which was equivalent to c 0.6x the FY17 total dividend, providing a buffer for any periods of lower portfolio income in future years.

So far in FY18, FMPI has declared three interim dividends of 1.30p; the fourth interim dividend will be dependent on the level of income generated during the financial year. FMPI’s current dividend yield of 4.0% compares favourably with the UK stock market and the majority of its peers in the AIC Flexible Investment sector (see Exhibit 13).

Peer group comparison

On 1 February 2018, FMPI and FMPG were both reclassified within the AIC Flexible Investment sector from the AIC Global Equity Income and Global sectors respectively. The manager believes that this is a more relevant sector for the portfolios as they have a very wide mandate, with an ability to adopt a more aggressive or defensive position when required.

In Exhibit 13 we highlight all the funds in the Flexible Investment sector with track records longer than one year, remaining mindful that the peers have a broad range of mandates. FMPI’s NAV total return is above average over one, five and 10 years, while lagging over three years. FMPG’s NAV total return is meaningfully above average over all periods shown, ranking first, fifth and fourth out of 17 funds over one, three and five years respectively, and third out of 16 funds over 10 years. FMPI and FMPG are currently both trading at a premium, unlike some of the peers that are trading on large discounts. Their ongoing charges are modestly lower than average. FMPI’s dividend yield is the fourth highest in the group, which is helped by the income transfer from FMPG.

Exhibit 13: Selected peer group (as at 18 May 2018)*

% unless stated

Market cap £m

NAV TR 1 Year

NAV TR 3 Year

NAV TR 5 Year

NAV TR 10 Year

Discount (ex-par)

Ongoing charge

Perf. fee

Net gearing

Dividend yield (%)

F&C Managed Portfolio Income

60.7

4.1

22.4

39.0

106.5

5.4

1.1

Yes

104

4.0

F&C Managed Portfolio Growth

73.5

12.4

35.7

62.7

104.8

1.6

1.1

Yes

96

0.0

Aberdeen Diversified Inc & Growth

398.4

(0.6)

1.3

6.6

35.0

(4.2)

0.4

No

112

4.3

Capital Gearing

233.4

1.6

21.7

25.0

90.1

3.1

0.9

No

100

0.5

Establishment Investment Trust

42.0

(0.7)

24.4

8.9

76.1

(14.5)

1.2

No

100

3.0

Hansa Trust 'A'

235.2

8.8

26.4

41.1

65.7

(30.4)

1.1

No

100

1.6

Henderson Alt Strategies Trust

108.9

6.0

24.3

21.2

(15.9)

(15.5)

1.1

No

100

1.7

Inv. Perp Select Balanced Risk

9.7

5.0

14.9

23.8

(0.2)

1.2

No

100

0.0

JZ Capital Partners

404.4

(8.1)

10.4

29.9

3.3

(32.6)

2.9

Yes

106

0.0

Miton Global Opportunities

74.9

8.9

53.1

69.4

89.9

(0.6)

1.3

No

95

0.0

New Star Investment Trust

77.4

8.5

37.7

43.6

8.9

(30.2)

0.9

Yes

100

0.7

Personal Assets

876.6

(1.5)

16.7

19.1

79.9

1.4

1.0

No

100

1.4

RIT Capital Partners

3,145.9

7.9

25.6

48.3

89.8

9.1

1.1

Yes

107

0.0

Ruffer Investment Company

410.9

(0.0)

7.2

11.6

102.1

2.0

1.2

No

100

0.8

Seneca Global Income & Growth

84.7

5.2

28.1

47.0

78.8

2.8

1.6

No

102

3.7

Tetragon Financial

866.4

5.7

55.5

87.6

328.1

(39.4)

1.7

Yes

100

5.5

UIL

148.1

3.5

74.2

66.8

31.4

(36.9)

1.6

Yes

113

4.5

Simple average (17 trusts)

426.5

3.9

28.2

38.3

79.7

(10.5)

1.2

102

1.9

FMPI rank in peer group

15

10

11

9

2

2

9

5

4

FMPG rank in peer group

14

1

5

4

3

6

11

16

13

Source: Morningstar, Edison Investment Research. Note: *Performance data to 17 May 2018. TR = total return. Net gearing is total assets less cash and equivalents as a percentage of net assets.

The board

FMPT’s board comprises four non-executive, independent directors, all of whom were appointed on 22 February 2008, shortly before the trust’s launch on 16 April that year. Richard Martin is chairman of the board and the nomination committee. He is an adviser to several family groups and a member of the board of Aurora Investment Trust. Martin was formerly chairman of the investment committee of the National Trust for Scotland. David Harris is the senior independent director. He is CEO of specialist investment and marketing consultancy group, InvaTrust Consultancy, which focuses on the investment fund management industry. Harris is currently a member of the board of The Character Group, Aseana Properties, Small Companies Dividend Trust, Manchester and London Investment Trust and SDF Productions. Colin McGill is chairman of the audit committee, and a qualified lawyer and accountant. He was CEO of Sportech, employed at the Bank of Scotland and chief executive of the corporate division of the Bank of Scotland. Alistair Stewart is chairman of the remuneration committee. He is a chartered accountant, has served as a director at Murray Johnstone (investment managers) and was head of research at private client stockbrokers Speirs & Jeffrey.

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Pty Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER Copyright 2018 Edison Investment Research Limited. All rights reserved. This report has been commissioned by F&C Managed Portfolio Trust and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Investment Research Pty Ltd (Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd (AFSL: 427484)) and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2018. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

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Germany

London +44 (0)20 3077 5700

280 High Holborn

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United Kingdom

New York +1 646 653 7026

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US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205, 95 Pitt Street,

Sydney , NSW 2000,

Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205, 95 Pitt Street,

Sydney , NSW 2000,

Australia

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Pty Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER Copyright 2018 Edison Investment Research Limited. All rights reserved. This report has been commissioned by F&C Managed Portfolio Trust and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Investment Research Pty Ltd (Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd (AFSL: 427484)) and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2018. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205, 95 Pitt Street,

Sydney , NSW 2000,

Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205, 95 Pitt Street,

Sydney , NSW 2000,

Australia

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