Kepler Trust Intelligence: New Research

RNS Number : 0785Q

City of London Investment Trust PLC

15 February 2019

 

City of London: New research       

15/02/19         

·    The trust continued its unrivalled dividend record in 2018, recording its 52^nd consecutive year of increasing dividends paid to shareholders…

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City of London (CTY) 's objective is to provide long-term growth in income and capital. The broader objective includes a reference to the "importance of dividend income to shareholders", which cuts to the heart of CTY's mission: an unrivalled 52-year record of increasing dividends paid to shareholders in consecutive years.

Within the UK mandate, there is a degree of flexibility to invest outside UK equities. Job Curtis has had sole charge of CTY since 1991, and over the ensuing 28 or so years, has demonstrated opportunistic adventures into fixed interest, convertibles and equities listed on other exchanges around the world in order to boost the yield, or add an exposure otherwise lacking in the FTSE All Share.

In Job's view, the UK has much to attract investors: good yields, a dividend paying culture and a wide range of listed companies to choose from. Job aims to invest in those which have strong balance sheets, those that offer a margin of safety in share price terms, and have demonstrably sustainable cash generation to support both dividends and capital expenditure for the future growth of the company. Understanding that he is investing people's hard-earned savings, Job believes in maintaining a diversified portfolio, with around 100 holdings at any one time.

Job emphasises that dividend yield is a key attraction for him when selecting investments, but that he tries to achieve a blend of higher and lower yielding companies through the portfolio. The resulting breadth of income sources is a key part of his approach, and is part of the reason for such a strong dividend record on the trust. Overall, Job believes that dividends form a decent part of overall returns for the vast majority of companies. In his view, selecting those companies that have the discipline of paying consistent and growing dividends, results in a high-quality portfolio which should over time outperform passive equity indices.

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