F&C INVESTMENT TRUST (FCIT) SHARES: 2025 PERFORMANCE ANALYSIS & 2026 OUTLOOK

F&C Investment Trust (FCIT): Overview and Position in the Market

Founded in 1868, F&C Investment Trust (LSE: FCIT) is one of the oldest and most established investment trusts in the world. As a constituent of the FTSE 100 Index, FCIT commands a robust reputation for delivering long-term, diversified investment strategies to UK and global investors. The trust is managed by Columbia Threadneedle Investments and aims to increase both capital and income for its shareholders over time.

As we look back at 2025, FCIT’s performance remained resilient amid mixed global economic signals, geopolitical tensions, and interest rate uncertainties. The company continued to deliver steady returns through its diversified portfolio of international equities. In particular, its exposure to technology, healthcare, and consumer goods helped balance macroeconomic risks across developed and emerging markets.

Performance Metrics: FCIT in 2025

During 2025, FCIT's net asset value (NAV) per share rose by approximately 6.7%, following a 5.2% growth in 2024. Share price performance also aligned with NAV trends, offering investors solid returns in terms of both capital growth and stability. The discount to NAV remained under control, often trading within a margin of 2% to 5%, showing healthy investor sentiment across the UK investment trust landscape.

Key contributions to FCIT’s portfolio performance included:

• Large-cap US technology stocks which rebounded strongly after a mid-2024 dip.
• Pharmaceutical companies driven by global demographic shifts and steady demand for healthcare innovation.
• Asia-Pacific exposure benefiting from modest GDP growth and increasing urbanisation trends in India and ASEAN economies.

In terms of income distribution, FCIT raised its dividend for the 53rd consecutive year, aligning with its reputation as a dividend aristocrat. This consistency is a key draw for retail and institutional investors alike, particularly in times of economic uncertainty.

Geopolitical and Market Factors in 2025

Despite rising uncertainty in the global arena — including unstable US-China relations and the fragmentation within the European Union — FCIT leveraged its wide geographic reach to mitigate localised risks. Monetary tightening policies initially impacted sentiment, but as interest rate hikes paused mid-year across several central banks, equities regained appeal, benefiting the trust’s equity-heavy allocation.

Emerging market volatility, especially in Latin America, modestly impacted returns, but FCIT’s relatively conservative exposure shielded investors from major drawdowns. Additionally, responsible investing and ESG standards continued to take precedence, aligning FCIT's policies with evolving shareholder expectations and regulatory criteria.

Key Drivers Behind FCIT Share Performance

In 2025, several fundamental and macroeconomic factors influenced the share performance of F&C Investment Trust (FCIT). These included global economic recovery patterns, performance of blue-chip technology holdings, institutional investor sentiment, and macroeconomic policies impacting currency and capital flows.

1. Portfolio Holdings and Return Generators

FCIT’s portfolio allocation underpinning its solid 2025 performance centred on high-performing industries globally. The top sectors contributing to gains included:

• Technology Stocks: Microsoft, Apple, and NVIDIA rebounded sharply owing to AI-driven growth and enterprise demand for software and data infrastructure.
• Healthcare Stocks: Investments in Johnson & Johnson and AstraZeneca provided defensive strength amid inflation concerns while serving growth-oriented investors.
• Consumer Staples & Industrials: Steady global demand supported an uplift in earnings for firms like Nestlé and Siemens.

Moreover, FCIT maintained a disciplined rebalancing strategy, avoiding over-concentration in any single geography or sector. This diversification again paid dividends when volatility returned in sectors like energy and real estate mid-year.

2. Exchange Rate Trends

The GBP/USD exchange rate fluctuated in 2025 due to interest rate decisions by the Bank of England and the Federal Reserve. Given FCIT’s considerable exposure to non-UK assets, weaker sterling offered a favourable conversion effect on foreign earnings, enhancing overall returns for UK-based shareholders.

3. Dividend Continuity and Shareholder Loyalty

Investors rewarded FCIT for its consistency in dividend payouts. The trust increased its dividend by 5.1%, maintaining a track record that appeals to income-seeking investors, especially post-retirement. This reliability in income, even in a changing economic environment, is a core element of FCIT’s brand identity.

FCIT also enhanced its communication with retail investors, publishing quarterly updates and increasing transparency in allocation decisions. This was met with confidence by intermediaries and added to the trust's visibility in a crowded market.

4. Leadership Changes and Strategic Direction

There were no major leadership changes in 2025, which ensured stability in investment style and operations. However, subtle rebalancing influenced by Columbia Threadneedle’s investment committee allowed for increased focus on sustainability mandates and compliance with evolving regulations such as UK SFDR-aligned disclosures.

5. UK Economic Landscape in 2025

UK GDP growth remained underwhelming at around 1.3%, restrained by interest rate pressures and weak business investment. Yet, the resilience of global equity markets and strong consumer confidence in the US significantly contributed to FCIT’s performance through its international diversification.

Risks, Milestones, and Opportunities for 2026

With its sound 2025 results, F&C Investment Trust now faces a shifting landscape as we look towards 2026. From diversification risks to potential opportunities in emerging markets and green investments, several aspects will influence future returns.

1. Inflation Expectations and Interest Rate Direction

A major risk to FCIT’s outlook in 2026 is tied to inflationary pressures and central bank rates. Should inflation prove stickier than current forecasts indicate, policy tightening may resume in the UK and globally. This could reduce the appetite for equities, especially in growth sectors held by FCIT.

Opportunities: If central banks opt for a dovish path, risk assets could rally in 2026 — offering FCIT more favourable conditions to capitalise on undervalued positions acquired in 2025.

2. Geopolitical and Sector-Specific Risks

• Geopolitical instability in the Middle East or East Asia could disrupt supply chains and investor confidence.
• Sector regulation in tech and pharma may pose headwinds to giants within FCIT’s top 10 holdings.

The ability of FCIT’s managers to rotate sectors dynamically will be a key to risk mitigation entering the second half of the decade.

3. ESG and Emerging Market Exposure

ESG continues to evolve from a niche strategy to a mainstream mandate. In 2026, increased scrutiny over greenwashing and sustainable practices could impact trust valuations. FCIT's path towards sustainability could become a differentiating factor providing alpha-generating opportunities, especially in green infrastructure and clean tech equities.

Additionally, exposure to emerging markets invites both upside and volatility. India's robust economic growth, reforms in Brazil, and AI-focused development in Southeast Asia could bring growth, yet these are regions sensitive to dollar strength and commodity pricing.

4. FX Sensitivity and Currency Volatility

Sterling outlook in 2026 remains uncertain. Higher volatility could affect FCIT valuation as the trust earns a majority of its revenues in foreign currencies. Investors should monitor GBP strength or weakness against USD and EUR closely as it could either enhance or reduce total return outcomes.

5. Trust Structure and Premium/Discount Dynamics

Throughout 2025, FCIT traded close to NAV, suggesting balanced sentiment. Any deviation in 2026 towards a persistent premium or discount could reflect underlying fundamental shifts. Broader sentiment towards UK-listed investment trusts may also influence FCIT.

Key Milestones to Watch in 2026

• Annual General Meeting (Q2 2026): Updates on ESG strategies and portfolio realignment will be unveiled.
• Dividend Declaration (Q1 2026): Investors anticipate the 54th annual dividend increase.
• Global economic data releases: Particularly US CPI and China growth updated to influence portfolio sectors.

In summation, while FCIT remains a stalwart in the UK investment trust landscape, 2026 will test its adaptability to new regulatory, economic and investor-driven dynamics. Their ability to sustain dividends, rotate successfully, and spot market dislocations could define performance over the coming 12 months.