The first global emerging markets investor: Foreign & Colonial Investment Trust 1880-1913

- FCIT pioneered a missing market (investment in diversified portfolios by the general public).
- It was the first institutional investor in emerging markets.
- We quantify the NAV discount and relate it to fund structure and investor sentiment.
- In contrast to today, FCIT didn't contribute to contagion in emerging market crises.

The Foreign and Colonial Investment Trust is the oldest surviving closed end fund, having been established in 1868. Its early success and emulation were related to its identification of a missing market - the provision of a wholesale diversified vehicle for the investing public. This paper is a micro-study of this leading investment trust during the First Era of financial globalisation. The history of this flagship fund over more than three decades provides an insight into the relative success of this financial innovation as well as into the risk and returns of investing in emerging markets over a century ago.