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View the article online at http://citywire.co.uk/wealth-manager/article/a760039

Trust Insider: the trust I would design if I won the Euromillions

by James Carthew on Jul 08, 2014 at 00:01

In price terms, LSL is one of the best performing funds in the global sector over the past year. More importantly, over the long term it has managed to match the performance of the FTSE All Share Index while exhibiting significantly lower volatility.

The net effect of this decent performance has been to propel the fund through the £100 million mark in terms of both assets and market capitalisation.

Having reached this size, LSL qualified this year for inclusion in the FTSE All Share Index. The demand for stock from index-tracking funds pushed it from trading around asset value to around a 10% premium.

Reversing shrinkage

Perhaps sensing that this was unhealthy, the board have called an extraordinary general meeting to approve the issue of up to 10% of LSL’s issued capital to address the over-demand. This has the potential to reverse the shrinkage through buy-backs that the company has experienced over the past few years.

LSL’s largest holding is Consistent Unit trust . Consistent Unit Trust Management Company Limited is a subsidiary of LSL. It manages two open-ended funds, Consistent Unit trust and Practical Investment fund

Consistent Unit trust has been around since 1988 and had assets of £20.7 million at the end of January 2014. It aims to provide consistent long-term capital and income growth and makes investments in companies the managers believe have proved their worth over the years, by having a consistent record of growth, and good prospects for continued growth in the future.

Practical Investment fund was established in 1941 and had assets of £66.7 million at 15 March 2014. It aims to provide above-average capital growth and increasing real income by investing in a wide spread of investment companies and selected financial securities (akin to LSL).

It also has a holding in LSL worth around £6 million. The unit trust management business made a profit of £318,000 in 2013 and is valued in LSL’s net asset value at £2.2 million.

The rest of LSL’s portfolio, about 50 holdings, is a mixture of investment trusts – mostly large, well-known names such as Law Debenture , Merchants Trust , Witan and City of London , corporate bonds and gilts.

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  • Consistent Unit Trust Inc
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  • Practical Investment Inc
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Look up the investment trusts

  • Hansa Trust A (Class A Ordinary)
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  • London & St Lawrence (Ordinary Share)
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  • Law Debenture Corporation (Ordinary Share)
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  • Merchants Trust (Ordinary Share)
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  • Witan (Ordinary Share)
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  • City of London (Ordinary Share)
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