FCT - Unaudited Statement of Results - Half Year Ended 30.06.2025

Monday 4th August 2025

F&C Investment Trust PLC (the 'Company' or ‘F&C’) today announces its results for the six months ended 30 June 2025.

• The Net Asset Value (‘NAV’) total return was 0.0%. This was behind the return from the benchmark, the FTSE All-World Index, which returned +0.8%.

The NAV decreased to 1,210.8p from 1,219.6p at 31 December 2024.

• The share price total return was +0.8%.

The share price was 1,108.0p (31 December 2024: 1,108.0p).

• The Board aims to increase the total dividend again this year. The first interim dividend of 3.8 pence for 2025 to be paid today, 1 August.

The Chairman, Beatrice Hollond, said:

“We continue to believe that our diversified approach creates more resilience in terms of outcomes for shareholders.”

Commenting on the markets, Paul Niven, Fund Manager of F&C, said:

“The opportunity set for investors within global equity markets should widen beyond the recent stand-out performers. A broadening in market returns should benefit our investment approach and we remain confident that we can continue to deliver our investment objectives, to grow both capital and income for our shareholders over the long term.”

The full results statement is attached.

Past performance should not be seen as an indication of future performance. The value of investments and income derived from them can go down as well as up as a result of market or currency movements and investors may not get back the original amount invested.

Contacts

Paul Niven – Fund Manager

020 3530 6396

Campbell Hood

campbell.hood@columbiathreadneedle.com

07860 911 622

Lansons

Tom Straker

columbiathreadneedle@lansons.com

07505 425 961

About F&C:

• Founded in 1868 – the oldest collective investment trust

• A diversified portfolio provides exposure to most of the world's stock markets, with exposure to over 400 individual companies across the globe

• Its aim is to generate long-term growth in capital and income by investing primarily in an international portfolio of listed equities

CHAIRMAN’S STATEMENT

Global equity markets posted a modest increase in sterling terms over the first half of the year. Despite facing headwinds in the form of global tariffs and escalating geopolitical tensions, the resilience of financial markets in the face of such uncertainty has been notable. The Company produced a Net Asset Value (‘NAV’) total return of 0.0%, a little below the return of +0.8% from our benchmark, the FTSE All-World Index, while our share price total return was +0.8%. Weakness in the US dollar negatively impacted the sterling-based returns of our portfolio over the first six months of the year.

Our NAV per share ended the period at 1,210.8 pence compared with 1,219.6 pence at the end of 2024. The return from our investment portfolio over the first half of the year, before costs and other effects, was 0.0%. The Company’s gearing (with debt at fair value) rose from 5.0% at the start of the year to 5.2% at the end of the period. The Company’s discount narrowed slightly over the six months, from 9.2% to 8.5%.

As our share price discount to NAV remained relatively wide, we have continued to buy back shares, albeit less than last year, with 1.35 million shares bought back over the first half of 2025. This was modestly accretive to our NAV total return. The Board remains committed to the use of share buybacks both to enhance net asset value and to dampen discount volatility. We regard the recent discount levels as unreflective of the strength of our investment proposition. We have continued to pursue an active marketing programme which aims to communicate the benefits of our offering for current and prospective shareholders. The Board remains focused on good governance and long-term sustainability.

The first half of 2025 has been characterised by significant geopolitical uncertainty, with President Trump's April announcement, on ‘Liberation Day’, of widespread tariffs on US trading partners representing a shock for markets. The breadth and scale of proposed tariffs caught investors by surprise, as they had begun the year with expectations of market-friendly deregulation and tax cuts designed to stimulate US economic growth. While market conditions stabilised following the announcement of a 90-day pause for those countries that avoided retaliation, persistent uncertainty remained throughout the second quarter, further heightened by conflict in the Middle East. Economic and geopolitical uncertainty led to a substantial rise in equity market volatility and contributed to weakness in the US dollar, which suffered its worst first-half of the year since 1973, declining by 9.7% against sterling.

US equities materially lagged returns from non-US markets, with Europe a standout performer, led by strong returns in the first quarter. Indeed, the underperformance of the US equity market, relative to the rest of the world, over the six-month period was one of the widest for decades. Divergence in interest rate policy helped non-US markets, as the US Federal Reserve held interest rates steady across four consecutive meetings, adopting a data-dependent approach to assess the economic impact of the administration's trade policies. Meanwhile, the Bank of England cut rates by 0.5% and the European Central Bank by 1.0%.

Sentiment towards Europe also benefited from a significant shift in fiscal policy orientation, particularly following the German election in February. The incoming coalition's proposals to reform the constitutional debt brake to accommodate higher defence spending, coupled with the European Commission's initiative to exempt such expenditures from deficit calculations, represent a notable evolution in the European fiscal framework with potentially far-reaching implications for markets.

INCOME AND DIVIDENDS

We paid a third interim dividend of 3.60 pence per share for the year ended 31 December 2024 in February 2025 and a final dividend of 4.80 pence in May, bringing a full year dividend of 15.60 pence. This was fully covered by earnings of 17.01 pence per share and represented an increase of 6.1% on the previous year.

Our net revenue return per share over the first six months of the year rose by 8.6% to 10.47 pence, compared to 9.64 pence over the corresponding period last year. Sterling was gained against both the US Dollar in the first six months of 2025 and was trading at a higher average level than in the first half of 2024 but the overall impact of currency movements detracted £1.3m from the return. Special dividends totalled £1.1m, down from £1.2m in the first half of 2024.

It remains the aspiration of the Board to continue the Company’s track record of delivering rises in dividends which exceed inflation over the long-term and we retain a substantial revenue reserve to help meet this objective if required. We have declared a first interim dividend for the current year of 3.8 pence per share to be paid on 1 August 2025. The Board plans to deliver another rise in our total dividend for this year, which will be the 55th consecutive annual rise.

THE BOARD

As explained in the last annual report, Edward Knapp has served as a Director for nine years and therefore stepped down from the Board at the end of July. We shall miss Edward’s outstanding combination of investment, operational and general management experience. His contributions to the Board’s discussions on strategy and risk have been particularly valuable.

Edward is replaced by Josh Bottomley, who will join the Board on 1 September. Josh is Chief Executive Officer of dunnhumby, a global AI and analytics business. He was previously an Operating Partner at CVC Capital Partners and has held senior positions at HSBC Holdings plc (Global Head of Digital, Data and Development), Google Inc. (Global Head, Display) and LexisNexis (Managing Director).

OUTLOOK

Despite recent volatility and uncertainty introduced through tariff policy and military conflict, the fundamental outlook for the global economy remains relatively sound. While earnings expectations for developed markets have seen downgrades, there are now signs that markets are expecting improving growth in 2026. This, coupled with expected cuts in interest rates, provides a constructive backdrop for global equity markets.

Actions of the new US administration, coupled with relatively rich valuations in US equities and the currency, have led to increasing discussion amongst market participants over whether US outperformance, in economic and market terms, will persist. Our portfolio holds a majority of its exposure in US assets and so has a substantial weighting to both the US equity market and the US dollar. Our Manager has, at the margin, been reducing US exposure in recent months and we remain vigilant around the risk of further underperformance from this region. Despite this, our Manager continues to see attractive opportunities in terms of individual stocks within the US and other markets. Indeed, our approach, which blends exposure across a range of stocks across various regions which display positive growth, valuation, and/or quality attributes creates a wider opportunity set for our portfolio than one which is narrowly focused from a stylistic perspective. In addition, as demonstrated by the consistency which has been delivered in our long-term returns, we continue to believe that our diversified approach creates more resilience in terms of outcomes for shareholders. Regardless of near-term risks and uncertainty, the Board remains resolutely focused on long-term opportunities for the benefit of our shareholders.

Beatrice Hollond

Chairman

31 July 2025

FUND MANAGER’S REVIEW

Global equity markets delivered modest gains overall in sterling terms during the first half of the year, with weakness in the US dollar detracting from returns on our US holdings. Global equity benchmarks gained +0.8%, though regional performance diverged markedly. European markets and emerging markets outperformed the US.

US underperformance contrasted with consensus expectations of ongoing US ‘exceptionalism’ under President Trump's administration. The tariff policies of the new US administration created tremendous uncertainty with concern over the potential impact on both growth and inflation. In addition, escalating Middle Eastern tensions, culminating in strikes by Israel and the United States against Iran, increased market volatility further, though these hostilities subsequently experienced rapid de-escalation.

Contributors to total returns in first half of 2025 %

Portfolio return 0.0

Management fees (0.2)

Interest and other expenses (0.1)

Buybacks 0.0

Change in value of debt 0.0

Gearing/other 0.3

Net asset value total return* 0.0

Change in share price discount 0.8

Share price total return 0.8

FTSE All-World total return 0.8

*Debt at market value

Source: Columbia Threadneedle/State Street

While the threat of tariffs was a dominant theme, the sustainability of government debt levels and the Moody’s downgrade of US sovereign debt amplified concerns over high US deficit levels just as the Trump administration pushed for Congressional approval for legislation to extend first-term tax reductions. Consequently, long-dated interest rates drifted higher and, within the currency market, sterling appreciated against the US dollar throughout the first half of the year, advancing from 1.25 to 1.37. This dollar weakness was evident across other major currency pairs, as the world’s reserve currency retreated against both the Japanese Yen and the Euro.

Persistent above-target inflation in both the US and UK has necessitated a more measured approach to monetary policy by central banks than investors had hoped for. US Federal Reserve Chair Jerome Powell, despite pressure from the President, has emphasised that the institution "can afford to be patient," noting the potential inflationary implications of proposed tariff policies. Interestingly, immediate tariff-driven inflation pressure has yet to materialise but remains a point of focus for investors.

Within equity markets, the “Magnificent Seven,” in aggregate, delivered losses (in sterling terms) over the first six months of the year but there was marked dispersion in returns. Artificial Intelligence (‘AI’) was again a significant driver of returns with the January launch of a model from Deepseek, a small Chinese company with relatively limited resources, raising significant concerns over whether recent expenditure by large technology firms would prove unprofitable. In addition, with the prospect of a paradigm shift in terms of the cost of AI production, those companies reliant on projects with high capital expenditure were considered at risk of stalling momentum in product demand. After a brief rout in technology stocks which saw Nvidia lose almost $600 billion of market value in a single day, the stock ended up rising by over 7% in sterling terms over the first half of the year as demand for its chips remained robust. Meta also gained over the period, rising by over a quarter in dollar terms, while Microsoft rose 8.1%. All the other Magnificent Seven stocks posted losses for investors, with Amazon (-8.7%), Alphabet (-14.8%) and Apple (-25.0%) all disappointing. Tesla produced a loss of over 28% for the six months, with Elon Musk’s foray into politics being viewed as an unwelcome diversion at a time when the company suffered from falling sales, increasing competition and the potential reduction and withdrawal of government subsidies.

Returns from our exposure in North America (-3.3%) lagged those of the benchmark (-2.5%) over the first half. Our US large cap growth strategy managed by JPMorgan Asset Management demonstrated relative resilience during the first half of the year, returning -2.9% compared to the Russell 1000 Growth Index's -3.2% return. Overweight positions in select streaming companies delivered positive performance, particularly Netflix (+37.2%) and Spotify (+56.6%). Netflix's performance was underpinned by robust revenue growth, driven by successful pricing adjustments and sustained subscriber acquisition. Spotify achieved a notable milestone in January, recording its first annual profit. Additionally, the underweight position in Apple (-25.0%) proved advantageous as the company faced headwinds related to its substantial iPhone manufacturing presence in China amid ongoing tariff uncertainties.

Within our value-oriented strategies, where market indices delivered returns in line with growth benchmarks, we saw divergence in relative performance. Our longstanding US value manager, Barrow Hanley, returned -6.7%, while the value strategy managed by Columbia Threadneedle Investments fared better, posting a -1.4% return against their benchmark Russell 1000 Value Index (-3.2%) during the period. Barrow Hanley's position in Vertiv, a provider of data centre cooling equipment, power solutions and technological infrastructure, contributed positively to portfolio performance. These gains were, however, offset by some significant stock detractors, notably UnitedHealth Group (-43.1%). UnitedHealth's performance deteriorated following the company's withdrawal of annual earnings guidance that coincided with reports of a criminal investigation concerning potential Medicare fraud allegations. In the portfolio managed by Columbia Threadneedle Investments, healthcare was, however, a positive contributor with active positions in CVS Health (+43.5%) and Tenet Healthcare (+27.3%) benefitting, although the position in Pacific Gas & Electric (-36.7%) detracted from relative performance.

Our Global Income (+3.3%) and Global Enhanced (+4.0%) strategies both delivered strong performance against the FTSE All-World Index benchmark (+0.8%). Global Income, which delivers a portfolio with an above market dividend, held a position in NRG Energy (+63.8%) which benefitted from the increased electricity demand from data centres to fuel AI usage. The company further strengthened its position by announcing the acquisition of eighteen gas-fired power plants. Our Global Focus (-0.1%) strategy was modestly behind its benchmark over the period. Howmet Aerospace (+55.6%), the US listed manufacturer of engineered metal products, was a standout performer after delivering strong financial returns and with robust demand from end markets.

Our European (including the UK) strategy was the strongest absolute performer over the first half of the year, returning +9.2%, although the strategy did lag its benchmark return of +12.3%. The main contributors to positive performance were in the financials sector, with stocks such as National Bank of Greece (+53.1%) and Bank of Ireland (+46.3%) contributing positively. The position in Pearson (-15.3%) detracted from returns, with the education provider citing tighter immigration enforcement in its key markets as a driver for lower test volumes.

Our focused Japanese strategy (+4.7%) outperformed its benchmark (+2.6%). Nintendo (+50.5%) emerged as a standout contributor, achieving record sales with its new Switch 2 console, the company's first new console release in eight years. Conversely, our position in Recruit Holdings (-23.6%), a human resources technology company, detracted from performance after the company's first quarter earnings fell short of expectations.

Emerging markets outperformed developed equities over the first half and, in the early part of the year, we divested in entirety from assets managed by Columbia Threadneedle Investments and transferred our exposure to Invesco, who are now managing a dedicated emerging markets strategy for us. We chose Invesco as manager for these assets after an extensive and thorough selection process. Our emerging markets holdings produced a strong performance, returning +6.1% in the first half of the year and outperforming the benchmark's +2.7% gain. Telefonica Brasil (+43.0%) performed particularly well within the strategy, as the telecommunications group continues to expand its 5G services across Brazil.

Our private equity exposure (-3.8%) lagged listed equities during the period and these remain challenging conditions for exits. While underperforming listed holdings in the first half of the year, we maintain conviction in these long-term investments. Our private equity holdings are well-diversified across regions, sectors, and company lifecycle stages. The commitments sourced and selected by Columbia Threadneedle Investments, focused on middle-market buyout opportunities, demonstrated resilience amid geopolitical headwinds, returning +2.4% over the quarter. Outside of our core holdings in mid-market funds and co-investments, the Pantheon Future Growth programme, which focuses on venture capital and growth equity, declined by 7.8%, largely due to the weakening US dollar.

CURRENT MARKET PERSPECTIVE

Despite discussions on the end of American exceptionalism, the US is still forecast to outpace all other G7 economies in growth terms this year and next. While US equities continue to trade at higher valuation multiples than international peers, their superior earnings growth has historically served to justify this premium rating and, in the near term, US earnings will likely outpace most other developed markets. Nonetheless, we have been expecting a broadening in market returns within equities. Further cuts in interest rates are anticipated in both the UK and Europe and there is the prospect of structurally higher fiscal expenditure in the Eurozone, which may boost growth prospects there.

While we have been reducing, at the margin, some of our US weighting through sales of both equities and the dollar, reports of the demise of US are likely exaggerated. Many of the large US corporates continue to demonstrate impressive competitive positions within segments of the market, such as AI, which will continue to see structural growth. At the margin, however, the opportunity set for investors within global equity markets should widen beyond the recent stand-out performers.

For emerging markets, the weaker US dollar has provided a strong tailwind in the first half of 2025 and the prospect of interest rate cuts in the US provides further optimism for prospective returns. Indeed, despite the risks surrounding tariffs, after an extended period of underperformance and stagnant domestic earnings it may be that emerging markets equities offer attractive relative returns, supported by potential further Chinese stimulus measures, global interest rate cuts and attractive valuations.

As always, the risks remain numerous. Tariff policy remains uncertain, and a multitude of different events could cause a flight from risk assets and equities. Despite this, we remain optimistic over prospective returns over the longer-term. AI should deliver improvements in productivity which will accrue to owners of capital and benefit the global growth outlook. The risk of a US recession in the near-term is currently low and interest rates look set to be cut further. A broadening in market returns should benefit our investment approach and we remain confident that we can continue to deliver our investment objectives, to grow both capital and income for our shareholders over the long term.

Paul Niven

Fund Manager

31 July 2025

Unaudited Statement of Results - Half Year Ended 30.06.2025

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