The smart way to diversify your portfolio

Building a resilient investment portfolio in today’s financial climate is challenging for investors. Recent episodes of stock market volatility have underscored a fundamental investing principle: the value of true diversification.

In recent years, many investors turned to broad global index trackers, believing they were buying automatic diversification. However, the reality of market-cap-weighted indices has changed significantly. Today, US equities account for over 72% of the MSCI All Country World Index¹, with a tiny cluster of technology titans making up nearly a third of that benchmark's total value.

As a result, many supposedly global portfolios have effectively become concentrated bets on a single sector in a single country, the opposite of true diversification.

To insulate their portfolios against unexpected market shifts, investors need a balanced foundation. That’s where F&C Investment Trust could fill an essential gap.

Diversification

Diversification has been central to F&C’s philosophy since the trust was established in 1868. F&C was the world's first collective investment scheme. For over 150 years, the trust has managed changing economic cycles, world wars, and financial crises by sticking to its mandate to deliver steady growth in both capital and income.

Under the stewardship of Fund Manager Paul Niven, who has led the trust since 2014, F&C takes a deliberate, active approach to risk management. As Niven notes, “Diversification isn't just an investing principle—it's a risk management tool. And in times like these, that matters more than ever.”

​Academic research highlights that over the long term roughly half of all listed equities fail to outperform cash. Just the top 4% of listed companies account for 100% of the net wealth creation for the entire US stock market since 1926 while about 57% of individual stocks (four out of seven) have lifetime buy-and-hold returns below cash interest rates (as defined by short-term US bonds).²

F&C’s strategy is explicitly structured to increase the likelihood of acquiring those future winners. The portfolio is deployed globally across the US, Europe, and emerging markets. This lets investors participate in international growth opportunities without being tied to the political or economic environment of any single country.

​Diversification is about more than geography. While many funds restrict themselves purely to growth, value, or quality strategies, F&C purposefully blends all three. Under Paul Niven’s direction, F&C targets innovative companies, well-established businesses trading below intrinsic worth, and high-quality, financially robust companies with strong balance sheets. The result of this multi-pronged approach is an all-weather portfolio designed to navigate different phases of the economic cycle.

Beyond public markets

Another distinctive feature that sets F&C Investment Trust apart from other investment trusts is its targeted allocation to private equity. Today, many high-growth, innovative companies choose to remain private for longer. As a result, a significant portion of corporate wealth creation occurs behind closed doors, largely out of reach for individual retail investors.

​F&C has set a goal to allocate between 5% and 15% of its portfolio to private equity. That gives investors measured exposure to dynamic, unlisted growth companies. This private equity strategy adds another layer of diversification, as private holdings are less exposed to daily trading volatility.

​Dividend record

F&C is a member of the FTSE 100 index and has over £7 billion in assets. It offers investors a well-diversified global portfolio in a single, easy-to-access holding. The trust is also recognised as an Association of Investment Companies (AIC) Dividend Hero. It has increased its annual dividend payout every year for 55 consecutive years, underscoring the strength of F&C’s diversified approach.*

​Whether you are looking to strengthen a Stocks & Shares ISA portfolio, add a dependable core holding to your SIPP, or establish a simple, globally diversified base for long-term growth in a General Investment Account, F&C Investment Trust offers an intelligent, time-tested approach to modern investing.

​To learn more about F&C Investment Trust and how it could support your investment portfolio, visit fandc.com.

Capital at risk.

​Eligibility to invest in an ISA and tax treatment depend on personal circumstances and all tax rules may change in the future.

​*There is no guarantee that dividends will continue to increase.

​Issued by Columbia Threadneedle Management Limited, No. 517895, registered in England and Wales and authorised and regulated in the UK by the Financial Conduct Authority. Approved September 2026 by Columbia Threadneedle Management Ltd.

¹ https://www.msci.com/indexes/index/990100/msci-world-index

² Bessembinder, Hendrik, (2018), Do stocks outperform Treasury bills?, Journal of Financial Economics, 129, issue 3, p. 440-457.