The changes to the oldest investment trust, launched in 1868, are part of a strategy to increase global exposure and diversify the trust’s sources of income.
The new Global Income portfolio, valued at £150 million or 6% of the investment portfolio, consists of 200 stocks and has a dividend yield of 4.5%. The portfolio has been funded by sales of UK stocks.
Ten of the trust’s existing holdings have been transferred into a new Global Funds Portfolio, which is valued at £110 million or 4.3% of the portfolio. This sub-fund will be used for investing in specialist areas globally over time.
The changes to the trust mean the UK weighting has dropped from 33.7% at the end of last year to 22% at the end of January.
The FTSE All World index has been put in place to measure the performance of the new, more global mandate, instead of the previous benchmark which comprised 40% FTSE All Share and 60% FTSE World ex UK.
The trust’s chairman Simon Fraser said: ‘Through increasing our global exposure, the benchmark and portfolio changes will build on our record of long term income and capital growth.
‘Over the last 10 years our dividend has increased by 143% and the share price by 97%. In 2012 we outperformed both the old and new benchmarks and increased the dividend by 20%. We are confident these changes will ensure we continue to deliver growth in income and capital for our shareholders.’
The trust is up 39.39% in share price terms over three years, against the FTSE World’s 36.20% and is trading on a discount of 11%.