F&C Managed Portfolio Trust: Going global for income
Savers who want a long-term income from shares are being encouraged to think globally. That is the approach of F&C Managed Portfolio Trust (Income), which yields 4.5 per cent.
This investment trust is a fund of funds. Manager Peter Hewitt has a free hand to invest in investment trusts that pay a decent dividend and that he thinks will perform.
This freedom makes for an eclectic portfolio, with investments in trusts that produce income from British, Asian and European shares, property and bonds.
Recent purchases include JPMorgan Emerging Markets Income and 3i Infrastructure, which invests in transportation, utilities and schools around the world.
One problem with a fund of funds is that investors can face double charging - those for the manager of the main fund, plus charges for the managers of the funds they buy.
But Managed Portfolio Income is structured to keep charges keen. As well as the income funds, a sister portfolio concentrates on growth but is managed as part of the same trust. This helps keeps costs low.
Investors can choose to buy growth shares or income shares, or both, which are separately listed on the stock market. But each portfolio is independent and profits or losses on one class of share will not affect the other.
Ben Willis, head of research at investment adviser Whitechurch Securities in Bristol, says: 'This is an interesting concept. The total expense ratio at just over 1.5 per cent is competitive for a fund of funds, especially against some unit trust peers.' Investment trust rules allow Hewitt to borrow against the fund's assets to make extra investments.
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FACTS AT A GLANCE
SIZE AND RETURNS: £23 million. One year, +26%; since launch, +3%.
MANAGER AND TENURE: Peter Hewitt since launch in April 2008.
THE BIG RIVALS: Jupiter Merlin Income Portfolio, Aberdeen Multi-Manager UK Income Portfolio.
HOW TO INVEST: As a listed share, the trust can be bought through any UK stockbroker, subject to commission and a stamp duty of 0.5 per cent. F&C runs a share plan allowing regular saving from £50 per month in an Isa with a minimum lump sum investment of £500.
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