Five financial goals and how to achieve them
The new year is the perfect time to hit reset on your financial goals. Whether you’re an experienced...
The City of London Investment Trust
Investment trust
Launched in 1891, the City of London Investment Trust is one of the longest-running investment trusts in the UK. It aims to provide growth in income and capital by investing predominantly in larger UK companies with international exposure. It has increased its dividend payment every year for the past 54 years.
Our opinion
The City of London Investment Trust is a well-established income and growth trust run by an experienced manager, Job Curtis, who has run the trust for almost three decades. His thorough research process and conservative approach to stock selection have generated steady returns over a long time. Maintaining dividend income is of the utmost importance to the board, making the City of London Investment Trust an excellent core option for investors wanting UK equity income exposure. It is very good value: it charges 0.325% per annum of net assets under management.
Trust manager
Janus Henderson Investors manages this trust. The company was formed in 2017 following the merger of Janus Capital Group and Henderson Global Investors. The business has more than 2,000 employees and offices in 28 cities worldwide. Autonomous teams with distinct investment strategies manage funds.
Job Curtis has managed the City of London Investment Trust since 1991. He has almost four decades of industry experience and started as a trainee stock broker in 1983. Job joined Henderson Global Investors in 1992, when it acquired Touche Remnant, employed as a fund manager.
Job is assisted in managing the portfolio by David Smith who joined in 2002; Andrew Jones who joined in 2005 and Laura Foll who joined in 2009.
I have a conservative personality and it is reflected in the portfolio. I pay attention to the downside risks as well as the upside potential.
Job CurtisTrust manager
Investment board
The board is chaired by Sir Laurie Magnus, who has over 40 years of experience in corporate finance markets and over 15 years as a member of investment supervisory bodies. He is currently a non-executive adviser to Evercore’s European business and holds several external appointments, including the JPM Multi-Asset Trust Plc.
The other board members are Martin Morgan, Samantha Wren, Ted Holmes and Clare Wardle. They have a wealth of experience, particularly in the areas of investment management and accountancy. The board meets with the investment team seven times a year and the company year-end is 30 June.
Investment process
The job focuses on companies that can pay and increase their dividends over time. He pays close attention to valuations and is careful not to overpay when he initiates positions. He particularly likes companies with a competitive advantage and has historically favoured multi-national brands with stable earnings and growth prospects. He has a bias towards large caps, with 60% of the portfolio typically held in companies that sit in the FTSE 100. However, there is a bias within this as the City of London Investment Trust prefers international companies (listed in the FTSE 100) as the managers believes these economies are likely to grow faster than the UK.
The job aims to provide shareholders with dividends between 10% and 30% higher than the average for the UK equity market. Dividends are distributed quarterly.
Risk
This trust invests primarily in UK equities, although it does have the flexibility to invest up to 20% in overseas equities. Stock specific risk is somewhat mitigated by the number of stocks Job holds, which is typically around 100.
Gearing
The City of London investment trust will at times use limited gearing, both short and long term, to enhance performance. In exceptional market conditions, gearing will not exceed 20% of net asset value at the time of drawdown of the relevant borrowings. The company also has some Private Placement Notes with the board taking out the additional loan to secure long-term fixed funding at an attractive rate.
Read more about this fund
The information, data, analyses, and opinions contained herein (1) include the proprietary information of FundCalibre, (2) may not be copied or redistributed without prior permission, (3) do not constitute investment advice offered by FundCalibre, (4) are provided solely for informational purposes and therefore are not an offer to buy or sell a fund, and (5) are not warranted to be correct, complete, or accurate. FundCalibre shall not be responsible for any trading decisions, damages, or other losses resulting from, or related to, this information, data, analyses, or opinions or their use. The Elite Fund rating is subjective in nature and reflects FundCalibre’s current expectations of future events/behaviour as they relate to a particular fund. Because such events/behaviour may turn out to be different than expected, FundCalibre does not guarantee that a fund will perform in line with its FundCalibre benchmark. Likewise, the Elite Fund rating should not be seen as any sort of guarantee or assessment of the creditworthiness of a fund nor of its underlying securities and should not be used as the sole basis for making any investment decision. FundCalibre disclaims any responsibility for trading decisions, damages or other losses resulting from any use of the Elite Fund rating. All performance data, as well as fund size, OCF, AMC, annual income (historic), share price discount or premium, is sourced directly from FE Analytics, and will change periodically.