F&C (FCIT ), the UK’s oldest investment trust, is poised for a possible return to the FTSE 100 after an absence of 13 years as compilers of the blue-chip index look to replace cybersecurity firm Avast following its $8.6bn (£7.3bn) takeover by NortonLifeLok Inc.

The £4.6bn global multi-manager fund, overseen by Paul Niven at Colombia Threadneedle, last month reported a 10.8% fall in asset value in the first half of the year. However, shares in the highly diversified portfolio of over 400 stocks have rallied 17% since mid-June in a summer market rebound that has bolstered its performance and market value ahead of the 31 August quarterly FTSE review.

The 154-year-old trust is now one of the few in its AIC Global sector to be up over one year, albeit with a modest 1.9% gain. That beats the 23% average fall in the peer group and is in stark contrast to arch rival Scottish Mortgage (SMT ), which has plunged 38% over 12 months as its high-conviction growth style has come unstuck as soaring inflation and interest rates have sapped appetite for more speculative investments.

F&C’s long-term record is also solid. Over 10 years it has generated total shareholder returns of 254%, beating the 247% of the MSCI World index and ranking third out of 17 global trusts, though Scottish Mortgage and Lindsell Train (LTI ) have done much better with gains of 555% and 401% respectively.

Analysis by JPMorgan Cazenove shows ConvaTec (CTEC), the Anglo-American medical products group, and Frasers (FRAS), the former Sports Direct retailer, are also vying with F&C for promotion from the ‘mid cap’ FTSE 250 index for a coveted place in the list of the UK’s top 100 quoted companies.

Index compiler FTSE Russell adds companies to the FTSE 100 that rank 90th or higher on the London Stock Exchange and demotes those that have fallen to 111th place or lower.

Fund manager Abrdn (ABDN) is set to be expelled from the FTSE 100 to the ‘mid cap’ FTSE 250 index. Its shares have tumbled 39% this year in response to stock market falls and further heavy outflows from its funds by worried investors.

Also up for the drop from the FTSE 100 are Hikma Pharmaceuticals (HIK) and kitchens supplier Howden Joinery (HWDN) after similar declines in their shares.

Good company

If successfully promoted, F&C will become the fourth investment trust in the FTSE 100. It will join Scottish Mortgage, which despite its slump retains an £11.6bn market value, the £11.9bn private equity giant 3i Group (III ), and Bill Ackman’s £5.6bn Pershing Square (PSH ) hedge fund.

‘Although the F&C Investment Trust hasn’t escaped the recent market volatility, it’s resilience with its share price up 10% over the past six months makes it another contender for entry into the FTSE 100. The trust aims to secure long-term growth in capital and income from an international diversified portfolio of listed equities, as well as unlisted securities and private equity,’ said Hargreaves Lansdown senior analyst Susannah Street.  

F&C, which changed its name from Foreign & Colonial four years ago, last ranked in the FTSE 100 during the immediate aftermath of the financial crisis when it enjoyed a seven-month stint ending in September 2009.

It first entered the index in 1996 for three months, re-joining briefly in March 2003, according to the company.

Other investment companies looking for advancement to the FTSE 250 from the FTSE Small Cap index are NextEnergy Solar (NESF ) and Bluefield Solar Income (BSIF ) after strong gains by renewable funds which have been boosted by both high power prices and inflation.

Jupiter’s struggling growth capital fund Chrysalis (CHRY ) is set to fall out of the FTSE 250 into the FTSE Small Cap after seeing more than two thirds of its market value wiped out this year as investors have challenged the previous high valuations of its fast-growing but loss-making businesses.

FTSE will announce its index changes on 31 August based on the previous day’s share prices. They will take effect after the market close on Friday 16 September.