Ideal for those wanting predictability of income and returns, and a suitable investment for children or grandchildren.
It aims for long-term growth in income and capital from a broad spread of large, blue chip, UK listed companies, medium sized companies, and has scope to invest in overseas stocks. The Trust has raised its dividends for 46 years - an industry record.
The UK equity market had a good month with a total return of 4.3% as measured by the FTSE All-Share Index. Economic data from the UK economy continued to be strong and the US Budget dispute was resolved, at least until the first quarter of 2014. The life insurance sector, where the Trust is overweight, was a notable outperformer as it is seen to benefit from the strength of equities. Utilities, where the Trust is also overweight, underperformed following the Labour Party's announcement of its intention to freeze energy bills for twenty months if elected.
A new holding was purchased in the IPO of Royal Mail, which appeared undervalued given the growth in its parcels division. In the utility sector, 10% of the Trust's holdings in SSE and Centrica were sold while a new investment was made in Foresight Solar Fund, which offers an attractive yield from UK ground-based solar plants.
The UK equity market continues to offer an attractive yield relative to fixed interest and bank deposits. In our view, dividends are set to grow at a rate greater than inflation given healthy company balance sheets and improving economic growth in the UK and most overseas economies.