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F&C HIGH INCOME - Fund overview

Bestinvest rating Unrated


Overview of F&C HIGH INCOME

This fund aims to provide investors with an annual yield of UK base rate plus 2%, payable monthly. The portfolio comprises 70% bonds / 30% equities, supplemented by a derivatives overlay to boost income and capital returns. Though the fund targets long term capital preservation, it has experienced some substantial drawdowns over its history.

Standard Initial Charge

5.00% 0.00%

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Fund summary

Sector  UK Equity and Bond Income
Product type  UNIT TRUST
Launched  January, 1993
Size  £221m
Yield 4.1%
Charging basis  INCOME
Dividends paid  28th of each month.
Cofunds  Yes
FundsNetwork  Yes
Bid price 18.50p 0.05p

Fund Charges

Standard Initial charge 5.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.39%
Annual management charge 1.50%
Total expense ratio 1.70%
Reduction in yield (10yr) 1.74%

Portfolio

f&c high income asset allocation illustration
Allocation Proportion
Equity 32%
High yield bonds
Quality bonds 68%
Property
Commodities
Hedge
Fund cash
f&c high income equity geographic illustration
Allocation Proportion
UK 100%
Europe 0%
Nth America 0%
Japan 0%
Pacific 0%
Other Equity 0%
f&c high income equity capitalisation illustration
Allocation Proportion
Large Caps 98%
Mid Caps 2%
Small Caps 0%

Investment process


The fund’s objective is to provide a monthly income of 2% p.a. over the Bank of England base rates, whilst keeping fluctuations in the unit price to a minimum. The portfolio comprises around 30% blue chip equities, designed to track the FTSE 100 index, plus 70% quality bonds (minimum A rating) – these are generally equally split between government and sterling corporate bonds, plus some structured products. This core portfolio is supplemented by a derivatives overlay strategy, which F&C view as a third asset class. This is designed to make up any shortfall in income from the equities and bonds and, unlike those assets, this part of the portfolio is actively managed. Two types of traded are generally undertaken: (1) Using index or variance contracts to exploit differences between implied and future variance; (2) Positions designed to benefit from the differences between implied and realised correlations of an equity index and its constituents.

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Version: 2.1.56