Unaudited Statement of Results - Half Year Ended 30.06.24

SEE ATTACHMENT FOR FULL STATEMENT OF RESULTS F&C INVESTMENT TRUST PLC Unaudited Results for the half-year ended 30 June 2024 Legal Entity Identifier: 213800W6B18ZHTNG7371 Information disclosed in accordance with Disclosure Guidance and Transparency Rule 4.2.2 1 August 2024 F&C Investment Trust PLC (the 'Company' or ‘F&C’) today announces its results for the six months ended 30 June 2024. • The net asset value (‘NAV’) total return was +13.2%. This was ahead of the return from the benchmark, the FTSE All-World Index’ which returned +12.0%. The NAV rose to 1,145.47p from 1,022.07p at 31 December 2023. • The share price total return was +6.4%. The share price increased to 1,012.0p from 962.0p at 31 December 2023. • The Board aims to increase the total dividend again this year. The first interim dividend of 3.6 pence for 2024 to be paid today, 1 August. The Chairman, Beatrice Hollond, said: “Equity markets delivered strong returns in the first half, led by technology stocks which were driven by robust earnings growth and ongoing enthusiasm relating to Artificial Intelligence (‘AI’). I am pleased to report that the Company produced a net asset value (‘NAV’) total return of +13.2%, outperforming the return of +12.0% from our benchmark.” Commenting on the markets, Paul Niven, Fund Manager of F&C, said: “Equity markets have had an excellent start to 2024, building upon their strong returns delivered in late 2023. A number of the ‘Magnificent Seven’, all of which we hold in our portfolio, were again stand out performers despite rich valuations, still high interest rates and signs of fading US economic exceptionalism. “Concentration of stocks within the S&P 500 has surged to the highest level since the turn of the century, with the Magnificent Seven now accounting for over 30% of the index. However, recently, performance within the group has been more mixed, with those geared to the AI theme leading. “F&C remains underweight to the Magnificent Seven, gaining more diversified exposure to the AI theme from holdings in Broadcom, Vertiv Holdings, and Qualcomm. We delivered relative outperformance on our listed holdings despite underweight positions in many of the US stocks which drove the first half rally. “Outside of the US, key market indices in Japan, Europe and the UK climbed to new record highs as the rally broadened and global economic activity recovered. Emerging Markets were the notable laggard as the Chinese economic recovery continued to disappoint. “Looking forward, while we remain uncertain of the unfolding economic environment, we do expect that performance within equities will broaden and that relative value will be an important consideration for prospective returns. “We have a relatively balanced approach within our portfolio between the cheaper, but more cyclically exposed areas of the market, and the higher growth, more expensive segments which have exciting prospects but appear fully priced. “A narrow market presents both opportunities and risks and we believe that a diversified approach will, in due course, provide better returns, with lower risk, for shareholders.” 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 FTI Consulting columbiathreadneedleuk@fticonsulting.com 020 3727 1888 About FCIT: • 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 Equity markets delivered strong returns in the first half, led by technology stocks which were driven by robust earnings growth and ongoing enthusiasm relating to Artificial Intelligence (‘AI’). I am pleased to report that the Company produced a net asset value (‘NAV’) total return of +13.2%, outperforming the return of +12.0% from our benchmark, the FTSE All-World Index. There was a general widening in the discount level of investment trust companies across the sector and the Company’s discount moved out from 5.9% to 11.7%. Consequently, the return to shareholders of +6.4% lagged the NAV return. Our NAV per share ended the period at 1,145.47 pence compared with 1,022.07 pence at the end of 2023. The return from our investment portfolio, i.e. before fees and other effects, of +12.2% exceeded the benchmark return, while higher market interest rates reduced the fair value of our outstanding debt, adding 0.4% to our NAV return. The Company’s gearing (with debt at fair value) fell from 6.3% at the start of the year to 4.9% at the end of the period. In response to a widening in our discount we increased the scale of share buybacks and bought back 10.2m of shares over the first half of the year. This added approximately 0.2% to our NAV. The Board believes that the relatively wide discount at which we ended the first half does not reflect the strength of our investment proposition for shareholders and remains firmly committed to the use of share buybacks where we see value. We note that our discount has narrowed since the end of June. In addition to the use of share buybacks to aid the management of our discount, we continue to pursue an active marketing programme with the aim of broadening our current shareholder base. Both Europe and the UK saw an encouraging fall in inflation rates over the first half of the year. UK consumer price inflation fell from 4.0% in December to 2.0% in May while, in June, the European Central Bank cut interest rates for the first time since 2019. US inflation, however, has proved to be ‘stickier’ due to more resilient economic growth, with the US Federal Reserve now expected to cut interest rates later and by less than previously forecast. Sterling fell modestly, by 0.7%, against the US dollar in the first half of 2024. The return from our private equity investments was +6.0%. While it was encouraging to see progress, these returns lagged gains from listed equities. The near-term backdrop for private equity assets remains challenging, particularly given rises in the cost of debt and a slow pace of deal flow. Nonetheless, we have made good returns from our investments in this area over longer periods and there are tentative signs that the environment for private equity is now improving. INCOME AND DIVIDENDS We paid a third interim dividend of 3.4 pence per share for the year ended 31 December 2023 in February 2024 and a final dividend of 4.5 pence in May. Our full year 2023 dividend of 14.7 pence per share was fully covered by earnings of 15.83 pence per share and represented an increase of 8.9% on the previous year. Our net revenue return per share over the first six months of the year rose by 10.9% to 9.64 pence, compared to 8.69 pence over the corresponding period last year. Although sterling was little changed against both the US Dollar and the Euro in the first six months of 2024, it was trading at a higher average level than in the first half of 2023 and this detracted £1.9m from the return. Special dividends totalled £1.2m, down from £2.2m in the first half of 2023. We expect that our earnings will again cover our full year dividend in 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 3.6 pence per share to be paid on 1 August 2024. The Board plans to deliver another rise in our total dividend for this year, which will be the 54th consecutive annual rise. We are also continuing our marketing efforts to increase awareness of the benefits of investing in the Company and to attract new investors. THE BOARD Tom Joy retired from the Board on 31 March this year after accepting an opportunity to take on a new executive role which precluded him from continuing as a Director of the Company. Tom made a significant contribution since joining the Board in 2021 and we shall miss his considerable investment knowledge and experience in global equity markets. I am delighted that Richard Robinson joined the Board with effect from 3 May 2024. Richard has been the Investment Director of the Paul Hamlyn Foundation since 2009 and was previously Head of Charities & Foundations at Schroders plc. He has held a number of senior positions at Rothschild Asset Management and is a former director of JPMorgan Global Emerging Markets Income Trust plc and Aurora Investment Trust plc. OUTLOOK While the fundamental backdrop is constructive and US recession has been avoided, global equity markets, dominated by the US, continue to trade at historically elevated valuation levels. Strong growth in earnings has propelled most of the so-called “Magnificent Seven” group of stocks to new highs but elevated valuations and market concentration remain a concern, with optimistic earnings expectations presenting an additional challenge if investment in AI fails to translate to sustained growth in earnings. Politics will remain an area of focus for investors in 2024 and, while a Labour government with a significant majority may present a more stable backdrop for UK assets, the US and Europe face a period of political uncertainty in the months ahead. This, in conjunction with signs of moderating US growth after a strong period, presents some near-term risk for equity markets. There remain grounds for optimism, however, including for international equities that have struggled to beat the technology-heavy US market for many years and which potentially stand to benefit from a broadening out of the equity rally. Improving economic prospects and earlier interest rate cuts may provide a near-term tailwind for European and UK equities, while corporate governance reform means that Japan continues to look attractive from a longer-term structural perspective. In addition, there are now signs of progress (in terms of valuation uplifts and increased pace in realisation of investments) in the private equity sector, helped by a pickup in merger and acquisition activity, which should provide further support. Against this background your Manager will continue to adopt a diversified approach and remains focused on longer-term opportunities as they emerge. Beatrice Hollond Chairman 31 July 2024 FUND MANAGER’S REVIEW Equity markets have had an excellent start to 2024, building upon their strong returns delivered in late 2023. A number of the ‘Magnificent Seven’ (comprising Alphabet +31.8%, Microsoft +20.4%, Amazon +28.4%, Apple +10.7%, Nvidia +151.9%, Meta +44.1% and Tesla -20.4%), all of which we hold in our portfolio, were again stand out performers despite rich valuations, still high interest rates and signs of fading US economic exceptionalism. Outside of the US, key market indices in Japan, Europe and the UK climbed to new record highs as the rally broadened and global economic activity recovered. Emerging Markets were the notable laggard as the Chinese economic recovery continued to disappoint. The first half of the year also served to remind investors that geopolitical events continue to present risks to the relatively benign backdrop. Globally, more voters than ever will head to the polls this year and rising geopolitical tensions, notably in the Middle East, led commodity prices higher over the period. US elections are likely to be a focal point for investors later this year. Contributors to total returns in first half of 2024 % Portfolio return 12.2 Management fees (0.2) Interest and other expenses (0.2) Buybacks 0.2 Change in value of debt 0.4 Gearing/other 0.8 Net asset value total return* 13.2 Change in share price discount (6.8) Share price total return 6.4 FTSE All-World total return 12.0 *Debt at market value Source: Columbia Threadneedle/State Street Concerns around inflation resurfaced and pushed government bond yields higher during the first half of 2024. Indeed, market expectations for interest rate cuts have been pushed out significantly since the end of last year, reflecting a view that rates will need to be kept higher for longer following a series of upside surprises to US inflation this year. Outside of the US, powerful disinflationary forces continue to supress prices, prompting the first interest rate cut from the European Central Bank in early June. However, the more hawkish outlook for US monetary policy has done little to dampen positive equity market sentiment, with developed markets rising strongly in the first six months of the year. With higher US yields over the period, sterling weakened modestly versus the US dollar from 1.27 to 1.26, while the yen dropped to lows last seen in 1986, having depreciated by 12.3% versus the US Dollar year-to-date despite market intervention by the Japanese authorities. Concentration of stocks within the S&P 500 has surged to the highest level since the turn of the century, with the Magnificent Seven now accounting for over 30% of the index. However, recently, performance within the group has been more mixed. Those most geared towards the AI theme, including Nvidia and Meta, have enjoyed the strongest performance year-to-date, whilst those most exposed to China, namely Apple and Tesla, have suffered due to burgeoning local competition and weak domestic demand resulting from China’s sluggish economic recovery and ongoing property crisis. The Company maintains significant exposure to the AI theme via positions in stocks such as Broadcom (+46.1%), Vertiv Holdings (+81.9%) and Qualcomm (+40.2%) and we delivered relative outperformance on our listed holdings despite underweight positions in many of the US stocks which drove the first half rally. Our US large cap growth strategy produced excellent performance over the period, delivering a return of +25.7% versus the Russell 1000 Growth Index return of +21.9%. Eli Lilly (+57.2%) contributed strongly to relative returns as weight loss drugs Mounjaro and Zepbound continued to boost revenue and profits. The strategy’s sizable underweight to Apple was also additive, given strong US market performance, following growing scrutiny from European competition authorities and intensifying competition from local rivals in China. Meta was another strong contributor, as the company delivered better than expected results for the first quarter. Within our US holdings the backdrop remained more challenging for lowly rated value stocks over the period. While Barrow Hanley (+10.9%) and Columbia Threadneedle (+9.8%) each generated returns which exceeded value indices, they lagged the broader market. Our long-standing US value manager Barrow Hanley generated good outperformance versus the value index (with the Russell 1000 Value Index gaining 7.6%), with positions in Vertiv Holdings and Broadcom each benefitting from continued bullish sentiment surrounding AI stocks and positive financial results. Vertiv - a leading supplier of cooling equipment, power solutions and technology to data centers - has gained by over 250% in the past year in response to a surge in spending on the digital infrastructure necessary to support AI applications. The Company’s US value mandate managed by Columbia Threadneedle Investments also delivered outperformance against the value index, with Qualcomm – a global leader in the development of semiconductors and wireless chips – performing strongly. It gained 40.3% over the first half. Performance across our global strategies was mixed versus global comparators. Global Focus (+18.6%) outperformed market indices, with Nvidia being a strong contributor to relative performance. Indeed, Nvidia’s revenues were up by 262% year-on year in May, driven by huge growth in the demand for chips manufactured specifically for the AI industry. The strategy also benefitted from lesser known companies geared towards the AI theme, with potentially more attractive valuations, such as Applied Materials (+54.6%), the largest US maker of chip-making machinery. Global Income (+10.3%) and Global Enhanced (+10.8%), both of which have a focus on companies with an attractive dividend yield, performed broadly in-line with the global benchmark, while Global Value, managed by Pyrford (+7.2%), disappointed. Here, under-exposure to the Magnificent Seven group of stocks, notably Nvidia, Meta and Microsoft, and the US market more broadly, detracted significantly. This negative impact more than offset the positive effects on holdings in stocks such as KLA Corp (+43.6%) and American Express (+25.4%). Our European (including the UK) exposure (+10.4%) was ahead of benchmark (which returned +6.5%). Novo Nordisk (+41.9%) – our largest European holding in the strategy - emerged as one of the standout performers among European mega cap stocks in the first half of this year, with excess returns attributed to triple digit revenue growth from its weight-loss drug Wegovy in 2023. Our position in Ryanair (-15.4%) detracted, as stocks in European airlines slumped after ticket fare prices rose less than previously forecast. Despite reporting a 34% rise in full-year profit after tax, delayed Boeing aeroplane deliveries sent Ryanair’s shares lower. Elsewhere, our Japanese holdings (+5.6%) produced returns in-line with the local benchmark but behind the global index. In local currency terms, this region was amongst the strongest performing areas globally during the first half, with the Nikkei up 19.3% year-to-date. However, weakness in the yen, which declined by 11.7% relative to sterling, detracted from returns here. Disco Corp (+54.9%), the Japanese precision tools maker for the semiconductor industry, was one of the strongest performing holdings, while holdings in Tokio Marine (+52.4%) and NGK Spark Plug (+25.3%) also performed strongly. Nonetheless, several holdings such as PAL Group (-33.5%) and Matsumotokiyoshi Holdings (-22.0%) disappointed over the six month period. Our emerging markets strategy (+4.6%) performed poorly over the period, lagging the emerging markets index due to weak performance delivery across a small number of holdings. While there were strong returns from Indian holdings such as Biocon (+41.5%), India’s largest biopharmaceutical company, and Max Healthcare (+37.9%), the private hospital chain, gains were offset against weak performance from larger positions in AIA Group (-19.9%) and Jeronimo Martins (-19.9%). Our private equity exposure (+6.0%) lagged listed markets but showed positive incremental progress despite persistently higher borrowing costs and a weak, albeit improving, environment for exits. This modest performance from our unlisted portfolio detracted from our returns relative to our benchmark over the period, with the Company’s listed portfolio, in aggregate, delivering solid outperformance versus the broad market benchmark for the year thus far. As noted previously, our private equity investments are long-term in nature and we have, historically, enjoyed robust returns from our private equity holdings compared to listed market equivalents. Furthermore, our holdings in this area are, as with the rest of our portfolio, highly diversified across a range of regions and sectors. Our recent private equity commitments with Columbia Threadneedle Investments, where we hold 7.7% of the total portfolio assets, rose in value by 3.6%, while our older holdings overseen by Pantheon and HarbourVest rose by 7.1% following a pick-up in distributions. The two Pantheon Future Growth programmes, with a combined $360m of commitments, also rose in value, by 10.4%. A further rise in market interest rates led to another reduction in the fair value of our debt over the period. The ten-year gilt yield rose from just more than 3.5% at the start of the year to just under 4.2% by the end of June. The rise in market yields added 0.4% to our NAV return over the six months. Furthermore, strong market performance meant gearing was additive, contributing 0.8%. CURRENT MARKET PERSPECTIVE Recent equity market performance has been robust – inflation is trending lower, cuts in interest rates are on the horizon, growth has been more resilient than expected and earnings have surpassed expectations. Market pricing now assigns a low probability to a recession and the industry consensus expects a healthy growth in earnings for the S&P 500 in 2024. However, with the ten largest stocks in the S&P 500 now accounting for more than 35% of the market’s total capitalisation, and almost 30% of its net income, equity markets are vulnerable to slowing momentum in this segment of the market. It is notable that the major winners of the broader AI theme, at least so far, are the infrastructure vendors, or ‘enablers.’ This includes cloud platform providers like Google, Microsoft and Amazon and graphics processing unit (GPU) producers like Nvidia and others. AI is still at an early stage of adoption overall and, while in the longer term there are likely to be significant benefits, most companies today lack the foundational building blocks that enable AI to generate value and productivity gains at scale. Moreover, signs of a weaker US consumer, including a sharp drop in home sales and an uptick in consumer delinquencies, and a potentially highly consequential US presidential election in November, present additional near-term risks for equity markets. Furthermore, if a ‘soft’ landing has been achieved with interest rates at current levels, then markets will need to reassess what constitutes a ‘normal’ policy rate going forward, which may well be significantly higher than the pre-Covid period. Looking forward, while a significant amount of positive news is already priced-in for equities, the Company is well positioned to benefit from a broadening of the rally driven by improving economic momentum outside of the US. Our balanced approach within our portfolio across recognised styles, including value, growth/quality and momentum, provides our shareholders with a well-diversified, global equity investment portfolio that places the Company in an excellent position to deliver on our performance objectives in the future. Paul Niven Fund Manager 31 July 2024