ii comment: City of London trust’s latest results

interactive investor on the investment trust's results for the year ended 30 June 2022.

City of London Investment Trust’s results for the year ended 30 June 2022.

Over the period, the trust beat the All-Share index, returning 7.5% in net asset value terms to the FTSE All-Share benchmark index’s 1.6%. The share price total return to shareholders was 7.7%. 

The dividend for this interactive investor Super 60 rated investment trust was increased for its 56th year in a row from 19.1p to 19.6p, and this was covered by earnings of 20.7p.  

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Dzmitry Lipski, Head of Funds Research, interactive investor, says: “High-quality, active management doesn’t get any better value, and the ongoing charge fell to 0.37% from 0.38%.

“In times of uncertainty, a regular and growing income is a comfort for investors, and a reward for taking stock market risk. The dividend was raised for the 56th consecutive year making it the top of the table of the AIC’s dividend heroes. The trust currently has a yield of 5% and pays a quarterly dividend. 

“City of London (LSE:CTY) investment trust remains a compelling core option for investors seeking UK equity exposure and features on the ii Super 60 list. 

“A conservative management style that prioritises sustainable income and long-term capital growth, the trust has a bias towards large, multinational companies and provides UK investors with exposure to global growth through the portfolio’s overseas revenues.

“The trust has a relatively cautious, well-diversified portfolio of around 100 holdings. The manager likes to run his winners, so portfolio turnover is low. Manager Job Curtis focuses on high-yielding, cash-generative businesses and takes relatively small bets away from the index, rather than aggressive sector and stock positioning.

“Curtis has been managing the strategy for three decades, a length of tenure that is exceptionally rare. Succession planning is something Boards consider as part of their long-term planning, and this is one of the advantages of the investment trust structure.  

“The trust has an outstanding long-term performance record. The recent strong performance is helped by the portfolio’s tilt towards large companies and dividend yield and away from highly valued, growth stocks and medium-sized and small companies.”