Risks and Features

 

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Investment trusts are quoted companies listed on the London Stock Exchange. Their share prices are determined by factors including the balance of supply and demand in the market, which means that the shares may trade below (at a discount to) or above (at a premium to) the underlying net asset value.

Competition among technology companies may result in aggressive pricing of their products and services, which may affect the profitability of the companies in which the Trust invests. In addition, because of the rapid pace of technological development, products or services developed by these companies may become rapidly obsolete or have relatively short product cycles. This may have the effect of making the Trust’s returns more volatile than the returns of a fund that does not invest in similarly related companies.

Investment trusts can enhance returns through gearing. This can boost a Trust’s returns when investments perform well, though losses can be magnified when investments lose value. This Trust does not currently employ gearing. Derivatives are used to manage the Trust efficiently.

Investment Policy
Asset Allocation
The majority of the Trust’s investments are in equities.
Risk Diversification
The Trust aims to achieve a spread of investments, with no single investment representing more than 15% of the underlying assets at the time of acquisition. The Trust seeks to diversify its portfolio into at least five industrial sectors, with no one sector comprising more than 35% of the portfolio.
Gearing
The Trust seeks to enhance returns over the long term through gearing. The Board monitors the level of gearing and makes decisions on appropriate action based on the advice of the manager and the future prospects of the Trust’s portfolio. Historically, gearing has been in the form of long term fixed rate debentures. Other than in exceptional market conditions, it is unlikely that, at the time of investment, gearing (calculated after deducting the value of holdings in government securities, held to offset some of the long term debentures issued) will exceed 20% of net assets. The Trust’s authorised borrowing powers state that the Company’s borrowings may not exceed its called up share capital and reserves.
 
 
 
 
 
 

"The rise of the smartphone and tablet computer is illustrated by the explosive growth in the creation and sale of Apps. Apple alone has seen 85 billion Apps downloaded by its users, as of October 2014."

Walter Price
Fund Manager

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"From entertainment to manufacturing, from business to the environment, from education to energy, technology has the ability to change lives on a global scale..."

Walter Price
Fund Manager

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"Cloud computing could displace businesses like Oracle or SAP. Amazon, for example, is offering a service where you can buy time on their servers for very little money - attractive proposition for start-up companies."

Michael Seidenberg
Portfolio Analyst

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