F&C strides into new territory - the UK

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The Independent Online
FOREIGN & Colonial, the investment trust group, has launched what it describes as its 'first purely UK-based investment trust' in 125 years of operations.

Jeremy Tigue, director of Foreign & Colonial Management, said yesterday: 'It may seem odd to offer a fund as conservative as a UK equity income and growth trust when many more adventurous funds are being launched to investors.

'We believe, however, that the sector has the double merit of strong immediate investment prospects and the ability to meet many investors' long-term requirements for relatively reliable and steady income growth.'

He added: 'The UK investment outlook is now very interesting. The present combination of low inflation and low interest rates has not occurred in the UK for almost 30 years.'

The new trust is to be called the Foreign & Colonial Income Growth Investment Trust. The trust is designed to be a core UK equity income growth holding for UK personal equity plans and other investors.

The new trust does not intend to seek any initial personal equity plan charge from subscribers. The offer for sale allows equity plan investors to use both 1993 and 1994 allowances on the plans to subscribe up to pounds 12,000 a person.

The minimum investment is pounds 2,000. An initial gross yield is expected to be not less than that of the FT-SE 350 index, which, at 2 February, stood at 3.3 per cent.

The trust will be launched by means of a placing and offer for subscription. Participants in the offer for subscription will receive units of five ordinary shares and one warrant at an offer price of 500p per unit.

Mr Tigue said his group expected a more stable rate of economic growth in the UK. 'Simultaneously, on the income side we believe that the prospects for dividend growth from substantial UK companies are the best for some years,' he said.