The portfolio selection was made on the following basis.

Ten shares were chosen. That is really the minimum number for a sensible spread of company risk. One complete failure would only represent ten per cent of the fund.

To simplify matters, there is no weighting, so on 1st January 2009, the initial investment was allocated equally between all ten companies.

To spread risk there are six different industry sectors. All of these except General Retailing, are reasonably resiliant to economic cycles.

They are very large, profitable companies, with excellent track records. The combined pre-tax profits of all ten companies at the end of 2008 was £52 billion. Considerable sums were consequently paid in tax to the UK Government and the companies provide jobs for hundreds of thousands of people. The market value of the ten companies on 1st January 2009, was £344 billion. Historically, dividends have been responsible for more than half the return on equities. All the companies selected for investment, are currently paying a share of their profits to the business owners, through dividends. Only HSBC and Marks & Spencer are anticipated to reduce their dividends, due to the difficult business conditions.

Although all except Banco Santander are UK based companies, most trade throughout the world. Therefore, both the commercial and currency risk is spread by their foreign activities and earnings. There will be a fluctuating effect on dividend income, in respect of the companies preparing their accounts in overseas currencies. A weaker £ against the Euro will magnify the dividend for Banco Santander's UK shareholders, and a weaker £ against the US$ will do the same for BP and HSBC's UK shareholders. The effect of this was shown recently by BP's 2008 final dividend. The Company reports in US$ and the dividend was increased by 4%. However, after currency conversion, UK shareholders received a dividend that had increased by 44%