F&C UK High Income Trust plc

Philip Webster

Director, Portfolio Manager, European Equities

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  • F&C UK High Income Trust plc aims to provide shareholders with an attractive level of income together with the opportunity for Trust growth.
  • The Trust invests predominantly in UK equities and equity-related securities of companies across the market capitalisation spectrum.
  • The trust has two classes of share – Ordinary shares and B shares – which pay the same level of quarterly cash distributions. The cash distributions on the Ordinary shares are paid as dividends while those on the B shares are paid by way of capital distributions and therefore taxed under capital gains tax (CGT) rules which can provide tax benefits to certain types of investors. The net asset value attributable to each class of shares is the same.
  • The shares may also be traded as units. Each unit consists of three Ordinary shares and one B share.

Phil Webster – Director of European Equities

Objectives

The Trust aims to provide an attractive return to shareholders each year in the form of dividends and/or capital repayments, together with prospects for capital growth.
 
In pursuit of its objective, the Company invests predominantly in UK equities and equity-related securities of companies across the market capitalisation spectrum.
 
The objective will be to achieve a total return in excess of that of the FTSE All-Share Capped 5% Index. The Manager will approach investment portfolio construction with the aim of maintaining a diversified portfolio with approximately 40 holdings at any given time. No single investment in the portfolio may exceed 10 per cent of the Company’s gross assets at the time of purchase. In addition, the Manager expects few individual holdings to exceed five per cent of the Company’s gross assets at the time of purchase. There are no maximum levels set for exposures to sectors.
 
Income may be enhanced from the investment portfolio by writing call options, but only where the portfolio has an existing holding and the holding is greater than the amount of stock subject to the call option. The percentage of the portfolio that may be used to generate call premium is limited to 5 per cent. by value at any one time. The Company may use derivatives for efficient portfolio management from time to time.

The Company has the power under its Articles of Association to borrow an amount up to 100 per cent. of the Company’s Adjusted Capital and Reserves. The Directors currently intend that the aggregate borrowings of the Company will be limited to approximately 20 per cent. of the Company’s gross assets immediately following drawdown of any new borrowings. The Directors will however retain flexibility to increase or decrease the level of gearing to take account of changing market circumstances and in pursuit of the Company’s investment objectives.
 
As required by the Listing Rules, the Company has a policy to invest no more than 15 per cent of gross assets in other listed investment companies.
 
Any material change to the investment policy of the Company will only be made with shareholders approval.
 

Risks

Stock market movements may cause the value of investments and the income from them to fall as well as rise and investors may not get back the amount originally invested.
 
A fund investing in a specific country carries a greater risk than a fund diversified across a range of countries.
 
Changes in rates of exchange may have an adverse effect on the value, price or income of investments. If markets fall, gearing can magnify the negative impact on performance.
 
Past performance is not a guide to future performance

Investment Risks

The value of your investments and any income from them can go down as well as up and you may not get back the original amount invested. Investments which are concentrated in a specific sector or country may result in less diversification and hence more volatility in investment values. Gearing is used for investment purposes to obtain, increase or reduce exposure to an asset, index or investment. The use of gearing can enhance returns to investors in a rising market, but if the market falls the losses may be greater.

Fund Facts and Key Dates

Fund Facts
Investment manager F&C Investment Business Limited
Benchmark FTSE All-Share Capped 5% Index
AIC sector UK Equity Income
Launch date 1 March 2007
Total assets £134.8 million (as at 28.09.2018)
Currency Sterling
ISIN (Units) GB00B1N4H933 (Ordinary Shares) GB00B1N4G299 (B Shares) GB00B1N4H594
SEDOL (Units) B1N4H93 (Ordinary Shares) B1N4G29 (B Shares) B1N4H59
Key Dates
Annual general meeting June
Year end 31 March
Dividend payment date(s) August, November, February and May
Ex-dividend date(s) July, October, January and April

The Board

Iain McLaren
Chairman
Iain was appointed in 2009. He is currently a non-executive director and chairman of the audit committee of Cairn Energy plc and a non-executive director of Baillie Gifford Shin Nippon plc, Ecofin Global Utilities and Infrastructure Trust plc and Edinburgh Dragon Trust plc. He was previously senior partner in Scotland of KPMG.
Julia Le Blan
Audit Committee Chairman
Julia was appointed in 2011. She has worked in the financial services industry for over 30 years. She retired from Deloitte in 2009, where she had been a tax partner since 1990. She is currently a non-executive director of Aberforth Smaller Companies Trust plc, Impax Environmental Markets plc, JPMorgan US Smaller Companies Investment Trust plc and The Biotech Growth Trust plc.
John Evans
John was appointed in 2013. He has worked in the investment management industry for over 30 years. He retired from Aberforth Partners, a specialist investment management firm, in 2011 having been one of its founding partners in 1990. He is Chairman of Drum Income Plus REIT plc and a non-executive director of JPMorgan Mid Cap Investment Trust plc and Securities Trust of Scotland plc.
James Williams
Senior Independent Director
James was appointed in 2009. He has been involved with the investment management industry for over 40 years. He retired from Baring Asset Management in 2002, where he was chief investment officer and head of global investment strategy. He is a non-executive director of Pacific Assets Trust plc and was previously a non-executive director of JPMorgan American Investment Trust plc, Prosperity Russian Domestic Fund, Royal London Growth and Income Trust plc and of Close Brothers Group plc.
Andrew Watkins
Andrew was appointed on 29 June 2017. He has worked in the financial services industry for over 40 years and was Head of Client Relations for Investment Trusts at Invesco Perpetual from 2004 until his recent retirement on 8 June 2017.

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