With the New Year just around the corner, now is a great time for me to look at additions for my portfolio for 2022 and beyond. One standout for me in this respect is F&C Investment Trust (LSE: FCIT). Since I last looked at FCIT back in July, the share price is up 7%. And the stock has seen healthy growth of 15% year-to-date.
I have always been an advocate of investment trusts, as they offer exposure to a variety of sectors in a single investment. As such, here’s why I would buy shares today.
The main reason I like F&C is because of its diverse portfolio. With nearly £6bn in assets under management, investing in over 400 companies globally, the trust adds real range to my portfolio. As of October 2021, its top holdings included Alphabet, Goldman Sachs, and Apple. All three of these stocks have seen at least 20% growth in price this year, showing the potential of the trust’s portfolio.
What I also like about it is its investment style. Simply put, it buys for the long term. And for me, this is perfect. It means issues surrounding volatility that may be experienced in the short term are less relevant. The trust has prospered under the guidance of manager Paul Niven, who has been at the helm since 2014. The last five years have seen a return of 70%, showing the positive impact he has had.
On top of this, the trust, founded in 1868, is the oldest in the world and therefore has stood the test of time. Its bounce-back from the crash we saw in March last year is proof of this. This is a major factor when I think about adding it to my portfolio.
With this said, I do have concerns about F&C. It third-largest asset allocation is emerging markets (9.2%). And as much as I see value here, the spread of the Omicron variant globally could have a negative impact on these markets. Cases have been confirmed in countries such as India and Brazil, both states that have struggled to contain Covid, even prior to the emergence of Omicron. However, as I mentioned above – these short-term periods of volatility should not pose a long-term threat. The trust has a proven track record over long periods, and I think its weighting in emerging markets will eventually bear fruit.
Why I’d buy
Although investor confidence may have taken a hit as we see Omicron impact our lives, F&C has proved it can weather storms such as these. The main attraction for me is the diversity it offers to my portfolio – and while past performance does not guarantee success in the future, for me it provides a good indication. Its record shows it has the potential to continue to flourish. As such, I would look to buy shares today and hold them for the long run.
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Charlie Keough has no position in any of the shares mentioned. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Apple and Microsoft. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.