New City High Yield Fund Ltd : Interim Manageme...

To:   THOMSON REUTERS
Date:  17 May 2013
From: New City High Yield Fund Limited

Interim Management Statement

For the Three Month Period from 1 January 2013 to 31 March 2013

Investment Objective

The investment objective of the Company is to provide investors with a high dividend yield and the potential for capital growth by investing mainly in high yielding fixed interest securities.

Performance Summary

Total Return	For the three month period ended 31 March 2013
Net asset value per share	+6.5%
Ordinary share price	+1.1%

Capital Values	As at  31 March 2013	As at 31 December 2012	% Change
Net assets	£156.1 million	£134.1 million
Net asset value per share	63.9p	60.9p	+4.9%
Share price	66.3p	66.4p	-0.2%
Premium	3.8%	9.0%
Gearing (100 = nil geared position) *	107	106

• Gearing = (Total assets less cash) ÷ Equity Shareholders' Funds 

Review for the Period:

The calendar year kicked off with the most positive January for equity markets for 24 years, as illustrated by the FTSE All Share Index up 6.27% on the month.  Also the temporary extension of the debt ceiling limit in mid-month had a positive effect on risk assets giving high yield bonds a very positive start to the year.

Then came February and the long awaited UK sovereign credit downgrade from AAA to Aa1 by Moody's.  This had a particularly aggressive negative effect on sterling, which fell from $1.5758 at the end of January to $1.5163 at the end of February.

Following the positive month for high yield bonds in January, February was very volatile although bond markets ended it little changed.  March arrived with the ongoing uncertainty of who would govern Italy , while in France, President Hollande refused to take any extra austerity measures this year to bring down the deficit, using the argument that this would further damaged an already weakened economy.  The Cypriot bailout in the middle of the month, with its associated "haircut on deposits"/ tax had a negative effect on the euro, confidence in the deposit guarantee scheme and, most important of all, "trust".  The consequences, intended or otherwise, may be that larger depositors and corporates with large sums of money in other, at risk, countries such as Spain and Italy will look to repatriate their funds, further weakening the peripheral financial institutions.

Dividend:
A second interim dividend for the year to 30 June 2013 of 0.90p per share was paid on 22 February 2013 to shareholders on the register on 1 February 2013.

Issue of Shares:
During the period the Company issued a total of 23,971,758 shares in two tranches, raising a total of £15.5 million.  The total number of shares in issue at today's date is 244,239,339.

Top Ten Holdings as at 31 March 2013

Company	Sector	Percentage of total assets
Antares Energy 10% 2013	Oil and Gas	3.0
Balfour Beatty 10.75% Cum Pref	Construction	2.9
REA Finance 9.5% 2017	Food products	2.9
Cable & Wireless 8.625% 2019	Telecommunications	2.7
Phoenix Life 7.25% 2049	Insurance	2.6
Brit Insurance 6.625% 2030	Financial	2.5
General Accident 8.875% Cum Pref	Financial	2.2
Moto Finance 10.25% 2017	Financial	2.2
Skipton 10% 2018	Financial	1.8
House of Fraser 8.875% 2018	Retail	1.8
Total		24.6

Analysis of Investments by Currency as at 31 March 2013

	Percentage of total investments
Sterling	61
US Dollar	17
Australian Dollar	7
Norwegian Krone	5
Euro	4
Swedish Krone	4
Canadian Dollar	2
Total	100

Analysis of Investments by Asset Class as at 31 March 2013

	Percentage of total investments
Bonds	82
Convertibles	8
Preference shares	7
Equities	3
Total	100

Analysis of Investments by Quotation as at 31 March 2013  

	Percentage of total investments
Listed/Quoted on a recognised investment exchange	100
Unquoted (convertible into a security quoted on a recognised exchange)	-
Unquoted	-
Total	100

Significant Events or Transactions since 31 March 2013
A third interim dividend for the year to 30 June 2013 of 0.90p per share was declared on 18 April 2013.  This dividend is payable to shareholders on the register on 26 April 2013 and will be paid on 31 May 2013.

The Board is not aware of any other significant events or transactions which have occurred since 31 March 2013 and the date of publication of this statement which would have a material impact on the financial position of the Company.

Daily and Key Information
Further information regarding the Company including the share price and the recent monthly fact sheet, can be found at the Investment Manager's website www.ncim.co.uk

Disclaimer
This interim management statement has been prepared solely to provide information to meet the requirements of the UK Listing Authority's Disclosure and Transparency Rules.

For further information please contact:
Ian Francis, New City Investment Managers    
020 7201 5366

Martin Cassels, R&H Fund Services Limited
0131 524 6140

Beth Harris, Newgate Threadneedle Limited
0207 653 9850

Note to Editors:

New City High Yield is managed by Ian Francis of New City Investment Managers.

The investment objective of the Company is to provide a high gross dividend yield and the potential for capital growth by mainly investing in high yielding fixed interest securities.

If you would like to receive the monthly factsheet on the New City High Yield Trust or any of the other New City Investment Managers' trusts please email [e-mail]

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Source: New City High Yield Fund Ltd via Thomson Reuters ONE

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