About this trust
Investment objective and policies
The Company aims to deliver dividend income with the potential for long term capital growth, from investing in a globally diversified portfolio of convertible securities.
- Investment objective to deliver dividend income with potential for capital growth from a portfolio of global convertible bonds.
- A convertible is typically a bond with an embedded option which allows it to be swapped for a company's shares on prescribed terms. In practice, convertibles perform like debt-equity hybrids and are expected to exhibit bond-like characteristics, providing income in normal and falling equity markets, but grow like an equity when share prices rise.
- The Company is free to invest broadly across sectors, geography, market capitalisations and credit quality.
- The value of investments and the income from them can go down and up, and you may not get back as much as you paid in. Past performance is not a guide to the future.
- For further risks associated with this trust please refer to the 'Risks' section below.
Points to Consider
- The investment objective of a trust may allow some flexibility in terms in portfolio composition.
- Exchange rate changes may cause the value of underlying overseas investments to go down as well as up.
- External factors may cause an entire asset class to decline in value. Prices and values of all shares or all bonds could decline at the same time.
- This trust may invest in non investment grade bonds, which increases the capital risk and may have an adverse effect on the performance of funds which invest in them.
- For income funds/shares - Dividend income is not guaranteed and will fluctuate.
- Derivatives are complex and funds that use them for investment purposes may be more volatile. These funds are considered to be higher risk than funds that invest only in shares.
- Convertible bonds are subject to the risks associated with both debt and equity securities, and to risks specific to convertible securities. Investors should be prepared for greater volatility than straight bond investments, with an increased risk of capital loss, but with the potential of higher returns. Their value may change significantly depending on economic and interest rate conditions, the creditworthiness of the issuer, the performance of the underlying equity and general financial market conditions. In addition, issuers of convertible bonds may fail to meet payment obligations and their credit ratings may be downgraded. This is generally known as credit risk. Convertible bonds may also be subject to lower liquidity than the underlying equity securities.
- The Fund may borrow to finance further investment (gearing). The use of gearing is likely to lead to volatility in the Net Asset Value (NAV) meaning that a relatively small movement, down or up, in the value of the Company’s assets will result in a magnified movement, in the same direction, of that NAV.
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In their words (as of 31 Aug 2016)
The Company delivered a positive share price and net asset value return in August. Within the portfolio, Europe was the strongest-performing region as global equity and convertible markets delivered a positive month. Performance in Europe was largely driven by holdings in the consumer cyclical and industrials sectors, as the UK economy continues to weather the referendum shock better than many expected. Our holdings in financials and communications were among the best performers on an absolute basis. We note better yield opportunities in the US but remain cautious on long-dated issuance, while continuing to take profit on names that have moved higher in price. In a rising rate environment, the ability to capture equity upside while having typically lower duration characteristics make convertibles an attractive investment relative to fixed income.
- Investment Trust Profiles
- Supplementary Prospectus published on 28 February 2014
- Prospectus published on 17 May 2013
- Prospectus published on 20 September 2013
- Full portfolio listing as at close of business as at 31st of August 2016
- Monthly Factsheet
- LSE Trust Announcements
- Investor Disclosure Document
Committee Terms Of Reference
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Reference Index Source: MSCI. Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express of implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even ifnotified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted without MSCIâs express written consent.
3 Actual gearing: Represents the excess amount above shareholders' funds of total assets less cash/cash equivalents, expressed as a percentage of shareholders funds. If the amount calculated is negative, this represents a net cash position.
7 Non-Benchmark holdings (where held) are classified in the appropriate sector/region. Cash is net current assets and holdings used as cash substitutes if applicable.