F&C trust back in FTSE 100

The F&C Investment Trust (FCIT) has moved back into the FTSE 100 following the latest quarterly rebalancing of the index.

The £1.8 billion trust’s re-entry to the index results from the share price declines of other investment trusts rather than a large increase in FCIT’s assets, the group says. FCIT is one of only two trusts in the FTSE, the other being Alliance Trust, which has £2 billion under management.

Listed companies that will be leaving the index on March 20 include 3i Group, the private equity firm, FirstGroup, the transport operator, and the London Stock Exchange. Meanwhile Lonmin, the platinum miner, and Fresnillo, the silver miner, are rejoining the FTSE 100 after being relegated at the last review.

Jeremy Tigue, the manager of FCIT, says that the trust’s inclusion in the index has historically been a bullish signal for markets. In 2003, the trust re-listed on the FTSE following a long bear market which bottomed and upturned not long afterwards, Tigue adds.

However, the main difference in this market is that FCIT has stricter controls to prevent its discount to net asset value widening too much.

FCIT’s average discount in 2008 was 5.8%, compared with an industry average of 14.8%, according to figures from the group.

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