The Trust aims to deliver an attractive return in the form of dividends and/or capital returns, together with the potential for capital growth. The portfolio is managed in two parts, an equities portfolio and a higher yield portfolio. The equities portfolio represents the majority of the Trust's assets and is invested in UK large and mid-sized companies while the higher yield portfolio is currently invested in predominantly investment grade corporate bonds.

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Key points

Investors Capital aims to provide shareholders with an attractive level of income together with the opportunity for capital growth. The majority of the Company's assets are invested in an equities portfolio comprising large and mid size UK companies.

The Company has two classes of share - A shares and B shares - which pay the same level of quarterly cash distributions. The cash distributions on the A share are paid as dividends while those on the B shares are paid by way of capital distributions and therefore taxed under capital gains tax (CGT) rules which can provide tax benefits to certain types of investors. Each unit consists of three A shares and one B share.

Fund facts
Investment manager F&C Investment Business Limited
Benchmark FTSE All-Share Capped 5% Index
AIC sector UK High Income
Launch date 1 March 2007
Total assets £143.2 million (as at 31.07.14)
Currency Sterling
ISIN (Units) GB00B1N4H933
(A Shares) GB00B1N4G299
(B Shares) GB00B1N4H594
SEDOL (Units) B1N4H93
(A Shares) B1N4G29
(B Shares) B1N4H59
Key dates
Annual general meeting June
Year end 31 March
Dividend payment date(s) February, May, August, November
Ex-dividend date(s) July, October, January and April

Fund manager commentary

The Company’s net asset value declined 0.4% in total return terms during the month. This compares with a 0.4% fall in the FTSE All Share 5% Capped Index over the same period.

The position in Rexam, the global beverage can manufacturer, was reduced. While long term fundamentals remain intact, near term headwinds from adverse foreign exchange movements, higher Aluminium costs and mixed emerging market trading suggests a more challenging outlook for the business in the year ahead.

The remainder of the position in SSE, the electricity and gas supplier, was sold. We believe that risks to the Company’s earnings from operational pressures and the ongoing electricity distribution review may lead to concerns over the sustainability of the company’s dividend policy over the longer term.

The positions in Rio Tinto and Billiton, the diversified international metals and mining businesses, were further increased. We believe mining sector fundamentals are slowly improving after a protracted period of poor performance. The improvement in both US and European economic growth prospects should help stabilise commodity prices while at the same time cost cutting across the industry together with greater capital discipline will improve cash flows and strengthen balance sheets.

During the month additions were also made to other holdings including Royal Dutch Shell, Howden Joinery and Booker.

We remain of the view that following the rally and re-rating of equity markets, valuation levels now appear less compelling despite strong corporate sector fundamentals. However, against a background of stronger global growth, increasing business confidence and low borrowing costs, we expect the recent upturn in merger and acquisition activity to gather pace and remain supportive for equity markets.

As at 31 July 2014

Percentage growth, total return, bid to bid price with net income reinvested in sterling. Basis in accordance with the regulations of the Financial Conduct Authority. Past performance is not a guide to future performance. Stock market movements may cause the value of investments and the income from them to fall as well as rise and investors may not get back the amount originally invested. A fund investing in a specific country carries a greater risk than a fund diversified across a range of countries. Changes in rates of exchange may have an adverse effect on the value, price or income of investments. If markets fall, gearing can magnify the negative impact on performance. The discrete annual performance table refers to 12 month periods, ending at the date shown.

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