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.

Equity markets fell in April, as comments from some global central banks became more hawkish and concerns over the European debt crisis intensified. The UK officially fell back into recession, with gross domestic product (GDP) falling in two consecutive quarters – albeit by the smallest of margins, which may well be revised away over the coming months. The UK stock market has a very large component of overseas earnings and took the disappointment in its stride. UK equities were among the best performing globally, where the market remained a relative haven of tranquillity.

At the sector level, we expect to see strong results from capital goods, as orders continue to come through strongly and margins improve. Some of the cheapest stocks are smaller companies, where we look to make use of low valuations. These companies are also contributing in providing overseas returns. Increased industrial productivity within the UK has benefited British competitiveness overseas; we see strong growth prospects for these companies.

Despite the ongoing macroeconomic volatility, at the corporate level there continues to be margin progression and earnings growth, as companies remain proactive in taking out costs and allocating capital efficiently. Cash generation is solid, and some companies have been buying back their shares. All in all, we believe the outlook for UK equities is encouraging.

James Henderson
April 2012