Life moves pretty fast, as Ferris Bueller once noted. Bueller would now be in his sixties, with very different investment needs from his carefree teens. Many investors face this dilemma: needing long-term growth or regular income at different points in their life. The unique structure of CT Global Managed Portfolio Trust means it could be a ‘fund for life’ - and not just for heroes like Bueller.
CT Global Managed Portfolio Trust has two distinct share classes – one for growth, and one for income. Crucially, the trust provides a conversion facility, which creates the ability to switch seamlessly between the two share classes. This can be used for all or some of your holdings and gives you the ability to adapt as your financial needs evolve.
The switching mechanism
Usually when investors sell assets outside a pension or ISA they will have to pay capital gains tax on the increase. This means switching between investments can be expensive. This can be a deterrent to portfolio planning. On CT Global Managed Portfolio Trust, the conversion between income and growth shares is not treated as a disposal for capital gains tax purposes. Investors can adjust their investment strategy without facing immediate capital gains tax consequences.
The conversion facility takes place once a year. For investors in CT Savings Plan investors, there is no conversion fee. There is also no stamp duty on the switch. The minimum conversion is 1,000 shares or your full holding if it is lower. We believe this contributes to the strategy’s flexibility and helps with long-term investment planning. Investors can switch according to their needs, rather than holding back because of potential tax implications.
Two distinct share classes
The Income and Growth share classes for CT Global Managed Portfolio trust certain common characteristics. They are managed investment trusts investing in a carefully-selected investment trust portfolio. They are designed to be diversified, with close attention to potential risks. They both provide exposure to a broad spread of different geographies, sectors, investment styles and investment managers.
Nevertheless, the growth and income share classes have distinct objectives. The growth share class strives to deliver high and consistent capital growth. It has a greater focus on stock market investments, which currently form 95% of the portfolio. Alongside conventional global equity trusts, the portfolio also includes areas such as emerging markets, private equity and technology to bring in new sources of potential growth.
The income share class is a managed portfolio focused on generating a high and sustainable income. This is currently 6% and the trust aims to grow this income at least in line with inflation every year. To achieve this, the managers draw on different types of investment, including, for example, infrastructure and fixed income investment trusts. It has around 65% in stock market investments.
The investment trust structure gives us certain levers to pull in delivering this consistent and growing yield. It allows us to reserve income in buoyant years to pay out in more difficult years. The trust has already built up significant reserves it can draw on and has grown its payouts to investors in every one of the 15 years since its launch.
Why might you switch?
For most people, growth is a greater priority early in their investing lives. When Bueller has settled down to a desk job, he needs to harness the power of compounding to build his wealth over time. Those with many years to invest usually have time to wait out any stock market volatility to harness the higher potential growth and inflation protection it offers.
The compounding effect of just a few percentage points of additional growth each year can make a huge difference over the longer-term. Over a year or two, investors may not notice the impact of a percent or two, but after 25 years, the effect can be significant. For example, £10,000 investment growing at 7% rather than 5% will be worth an additional £22,442 over 25 years. That’s over £57,000 rather than £35,0001.
But once Bueller is a little older his priorities might have changed. Having built wealth in the growth shares, he might receive an inheritance, for example, and want to use it to generate an income and look towards retirement. As he gets older, he has less flexibility to take risks. In this case, he could convert to the income shares without incurring a capital gain, draw the 6% income and be reassured that the managers are aiming for the income to grow at least in line with inflation.
It is a similar situation to many investors. While they may have income to cover day to day living through an annuity or the state pension, retaining some equity income in their portfolio can help keep a growth engine in retirement. Retirement can last 20-25 years and inflation protection is important.
But it is not just age that may lead to a switch. There are a range of other moments when prioritising income can be important. You may need to pay education costs for your children, for example. You may have periods of retraining, or be setting up a business when it helps to have some extra income.
This may not be a permanent change and you may want to switch back to growth eventually, but the income can see you through a difficult period.
You may also want to switch between the two to accommodate different market conditions. The income investment trust portfolio may be more attractive in some market conditions, while the growth investment trust portfolio works better in others. For example, in a higher interest rate environment, income is more widely available, including from bonds and cash, and there may be less need for an income strategy and investors may prefer to prioritise growth. Equally, when risk appetite is strong and stock markets are doing well, investors may want to participate as much as possible. In more difficult markets, a regular income may be reassuring.
It doesn’t have to be one or the other. The conversion facility allows you to convert your whole shareholding or a portion of it. The trust has been designed for investors to shape it to their evolving needs over time. CT Global Managed Portfolio trust could be a trust for life, adapting to your (and Ferris Bueller’s) fast-moving life.
*Investment trusts may trade at a discount or premium and discounts can persist or widen. Investments may carry higher risk and returns are not guaranteed. Views are subject to change.
Important information:
information is correct as of date of publication. Information from external sources is considered reliable but there is no guarantee as to its accuracy or completeness.
Capital at risk. Tax treatment depends on individual circumstances and may be subject to change in future.
Investment risks
The value of your investments and any income from them can go down as well as up and you may not get back the original amount invested. Gearing is used for investment purposes to obtain, increase or reduce exposure to an asset, index or investment. The use of gearing can enhance returns to investors in a rising market, but if the market falls the losses may be greater.
Issued by Columbia Threadneedle Management Limited and approved for distribution 23/10/2026.
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