By Annabel Brodie-Smith
Imagine the lights on top of the Tardis flashing as it lands on 19th March 1868 in a dimly lit Dickensian London street. The Doctor emerges as a horse and carriage rattles by and scurries off into the fog. He could have been on his way to meet Queen Victoria or the Prime Minister, Benjamin Disraeli, but he was actually on his way to meet Philip Rose who that day launched Foreign & Colonial Government Trust, the very first investment company. Foreign & Colonial Investment Trust, as we know it today, was launched for private investors, “to provide the investor of moderate means the same advantage as the large capitalist.”
If the Doctor returned next Monday he’d be in time for Foreign & Colonial Investment Trust’s 150th birthday party. He’d find a company which continues to meet private investors’ long-term financial needs and has grown to nearly £4bn. Read Foreign & Colonial manager Paul Niven’s answers to our questions on how the trust has evolved.
The Doctor today would also find a vibrant investment company industry of £173 billion in size with 400 investment companies investing in shares around the world but also new assets like property, private companies, debt and infrastructure.
This month we have brought together the views of the managers of the first five investment companies, the pioneers of the industry. We have investigated how these companies remain relevant for today’s investors and how they have adapted to meet investors’ needs.
Watch our video where I discuss this with the managers of the three oldest investment companies, Paul Niven, manager of Foreign & Colonial (150 years), Ben Ritchie, manager of Dunedin Income Growth (145 years) and James Dow, co-manager of Scottish American.
Our monthly investment journalist expert, Ian Cowie, looks at investment companies’ past and how history “can help us put the uncertainties of the present in perspective”. Whether it’s Brexit or Trump none of these presents such a threat to investors as the First World War, the Great Depression or the Second World War. “So any form of investment that survived all these crises – and more besides – is worth careful consideration, here and now.”
Finally, the legend that is Peter Spiller, the industry’s longest serving manager, who has been at the helm of Capital Gearing for 35 years, looks at how investment companies have evolved. This begins in the 19th century when investment companies held a mix of bonds and equities. In the 20th century equities came to the fore, before the rise of the new asset classes more recently. Peter believes that conditions now are far less favourable than 35 years ago: “the most successful investment companies going forward will be those that take advantage of the new opportunities that have opened up over the last 35 years, thus having an asset allocation that looks more like those that prevailed in the 19th century than the 20th.”
Coming down to earth, it’s important I mention the new regulation, GDPR (General Data Protection Regulation) which comes in during May. We will be emailing you over the next few weeks to ask if you’d like to keep on receiving Compass from the AIC. If we don’t get your tick in the box we won’t be able to send you Compass after May. We promise to make it as easy as we possibly can to keep receiving Compass so please look out for that email.
Also research firm, QuotedData, has produced a guide on investment companies which explains how investment companies differ from other funds, the types of investment company, and how to research investment companies. It can be accessed here.
Finally, as the industry celebrates its 150th anniversary I’d like to thank you for your continued support and enthusiasm. Rather like the Tardis, it’s only when you step inside the investment company industry that you discover there’s a universe of opportunities waiting for you.
Happy birthday investment companies!
Annabel Brodie-Smith Communications Director, AIC
150 years of innovation: panel video with Foreign & Colonial Investment Trust, Dunedin Income Growth Investment Trust and Scottish American. Click on the image below to play the video.
