Suits investors looking to access the growth potential of the full spectrum of companies in the UK, while enjoying some income. Long-term investors prepared to accept some short-term volatility from companies outside the main market in return for the prospect of higher growth, may also find it of interest.

The Trust aims to provide a higher-than-average return for investors, with growth of both capital and income over the medium-to-long term. It invests in a broad range of mainly UK companies, from blue chips to small and medium-sized companies, with not more than 50% of the portfolio comprised of FTSE100 companies.

• The Trust invests in a broad range of mainly UK companies, from blue chips to small and medium sized companies, with not more than 50% of the portfolio comprised of FTSE 100 companies.
• The Trust has an outstanding long term track record of income growth, with 38 consecutive years of increasing dividends until 2009, when the dividend was held. It has a current dividend yield of 3.25% (Source: Henderson Global Investors as at 31/08/2011). Please remember that past performance is not a guide to future performance.
• The Trust can blend growth opportunities from the largest UK corporations with those from well run, family-owned companies.

• Some of the investments in this portfolio are in smaller companies shares. They may be more difficult to buy and sell and their share price may fluctuate more than that of larger companies.
• If a fund is a specialist country-specific or geographic regional fund, the investment carries greater risk than a more internationally diversified portfolio. Full details of risks.

Global equities remained relatively flat in December. There was evidence of continued improvement in US growth, with an unexpected drop in unemployment to 8.6%. In the eurozone there were some signs of stabilisation, however on the whole activity continued to contract. Similarly, in the UK the downward trend continued, retail sales dropped 4% month-on-month as higher prices combined with lower consumer confidence hit the high street. The leading sectors from the FTSE All-Share Index were tobacco and construction & materials gaining 4.5% and 3.9% respectively, while weaker sectors included industrial metals, personal goods and automobiles & parts losing 11.9%, 5.8% and 5.6% respectively. We made no changes to the portfolio this month.

UK equities are cheap on historic measures of value such as the price-to-earnings ratio. Companies in the portfolio have taken strong action to position themselves for a difficult economy. For these firms, corporate cash generation is high and as a result their company balance sheets are improving as they pay off their debt. The UK economy is rebalancing and export performance is improving. Retail sales have remained relatively unchanged since the recession, whilst the production of motor vehicles has shown modest growth. Wage inflation in China is boosting the production and exporting of motor vehicles from the UK. With this in mind, the fund is overweight in industrials to take advantage of this increase in production.

James Henderson
December 2011