City of London is one of my steady, predictable, middle-of-the-road income trusts. It feels like a dependable, faithful old carthorse.
I first purchased CTY for my personal equity plan (PEP) in 1995 - it has served me well enough over the past two decades and it represents the largest weighting in my IT portfolio (ISA and SIPP drawdown).
City have just announced full year results for the year to 30th June 2016 (link via Investegate). Share price total return has increased by just 0.4% over the year and moved from premium to discount - compared to the FTSE All Share benchmark of 2.2%.
Dividends have increased by 3.9% from 15.3p to currently 15.9p giving a yield of 3.9%. This will be 50 years of rising dividends - quite an achievement if you think back to the start of this run when England last won the World Cup! Reserves were bolstered by the addition of a further 1p per share to 13.5p.
Earnings per share rose by 3.4% to 17.42p, mainly reflecting the underlying dividend growth from investments held of 4.6%.
Ongoing charges are 0.42% and remain the lowest in the sector.
Over the year there was an increase in the weighting in large companies with a corresponding reduction in the weighting of medium-sized companies. Large companies (FTSE 100) now account for 68% of the portfolio, medium companies down from 23% to19% and overseas-listed companies 13%.
Relative to the FTSE All-Share Index, City of London benefited from being significantly underrepresented in banks and the oil and mining sectors. The best three stocks held in the portfolio which contributed to performance were US telecoms firm Verizon, insurer Amlin which was subject to a take-over bid and Br. American Tobacco.
|5 Yr Comparison CTY v Vanguard LS 100|
(click to enlarge)
Average annualised total return over the past 5 years has been good at 12.9% p.a. compared to say Vanguard Lifestrategy 100 which has an average return of 12.6%.
This trust is possibly the nearest proxy to a HYP portfolio often discussed on the Motley Fool discussion boards.
Unlike Murray Income trust which has disappointed over the past couple of years and has now been sold, I am happy to continue holding CTY for the foreseeable…
As ever, please DYOR