Strong outperformance reported by Investors Capital Trust

Investors Capital Trust plc (ICT), which is managed by Rodger McNair from F&C's Edinburgh office, has this morning released its interim results via the London Stock Exchange.

Over the six months to 30 September, ICT outperformed significantly its benchmark against a difficult market backdrop.

By way of background, ICT has a unique and innovative structure among investment trusts. It was launched in February 2007 as rollover vehicle for the predecessor trust of the same name. The investment portfolio is managed in two parts the proportion of which varies depending on market conditions. The first part comprises investments in UK equities and equity-related securities (Equities Portfolio) and the second part comprises investments in fixed interest and other higher yielding stocks and securities (the Higher Yield Portfolio).

The trust has a unique share structure comprising two share classes - A shares and B shares. The two share classes are essentially the same bar one key aspect. The A shares pay traditional dividends each quarter while the B shares pay a capital distribution of an equivalent amount, and at the same time, as the dividend on the A share. The B shares distributions are taxed under the capital gains tax regime which provides substantial tax benefits to certain types of shareholder. The attraction of the B shares class has been further enhanced by the recent changes to the capital gains tax regime.

Particular points of note during the reporting period are -

The net asset value (NAV) total return was -10.1% for share and unit holders over the six month period to 30 September 2008 compared to the FTSE All-Share Capped 5% Index, which returned -14.0 per cent on a comparable basis.

Based on share price performance, the Company was the best performer within the AIC UK High Income Sector for the period.

The Equities Portfolio produced a total return of minus -10.9%, which was ahead of the -14% total return from the FTSE All-Share Capped 5% Index. The equity out-performance was driven by strong stock selection.

The distribution yield for A and B shareholders was 6.9% based on the share price of 77.5p as at 30 September 2008 and this compares favourably with the yield on the FTSE All-Share Index of 4.6%. .

Looking at the NAV total return performance since launch on 28th February 2007 until 31st October 2008, the Trust is -22% compared with the AIC high income sector average (unweighted) of -41% and the benchmark index -28% (source:Datastream).