Abstract

The Foreign and Colonial Investment Trust (FCIT) is the oldest surviving closed end fund in the world today. Its early success was related to its identification of a missing market, namely, the provision of a wholesale diversified investment vehicle for the investing public. Whilst much research has been conducted on aggregate international capital flows in this period, little work has been undertaken on the prime investment institutions. This micro-study seeks to fill this gap by undertaking detailed quantitative analysis of the leading investment trust investing widely in emerging markets during the first era of financial globalisation before WWI . The history of this flagship investment trust over more than three decades up to 1913 provides an insight into the relative success of this institutional innovation as well as into the risk and returns of investing in global emerging markets over a century ago.