Rodger McNair, the manager of the Investors Capital Trust, is preparing to dip into the banking and property sectors after a cautious approach helped the trust post a 6% gain during its first seven months in a revamped form.

The trust, which has been around in various guises since 1891, recently shed its split-capital structure, an arrangement that lost favour with investors during the post-millennium bear market when many highly-geared trusts posted heavy losses.

Since March, the high income trust has offered A' shares, which pay a conventional dividend, alongside B' shares that make the same distribution in the form of capital.

McNair, who works from F&C Asset Management's Edinburgh offices, has been pursuing a cautious approach. The trust is 20% geared but all the borrowings are placed in fixed-interest investments, with another 12% in cash.

He also steered clear of the financial sector, which has been hit by worries about the knock-on effect of defaults on sub-prime mortgages in the United States, and property, where he thought valuations excessive.

However, McNair is looking for a home for his uninvested cash and is eyeing the very areas he eschewed as prices have fallen to attractive levels.

"People have been selling out of property where we can see some interesting positions emerging and also within the financials. We will continue to take money out of resources, both oils and mining."

In the seven months to the end of September, the trust returned 6% in net asset value terms. The trust's 50-stock UK equity portfolio made 8.5% while the bonds returned 2%.

The £170m trust is to pay a dividend of 5.35p per share in the period to March 31, 2008.