Monday, 16 September 2013

City of London Trust - Full Year Results

City of London, like Murray Income, is another of my steady, predictable, middle-of-the-road income trusts. It is one of the older investment trusts incorporated in 1891. For the past 22 years it has been managed by Job Curtis. He is a value investor who counts Warren Buffett as his investment hero.

City have just announced full year results for the year to 30th June 2013. Net assets total return has increased by 23.8% over the year compared to the FTSE All Share benchmark of 17.9%. Dividends have increased by 4.1% from 13.74p to currently 14.3p giving a yield of 3.9%. Companies in City of London's portfolio on average increased their dividends by 6.2% (excluding special dividends).  The dividend has been increased for the 47th consecutive year. 

3 yr comparison -v- FTSE All Share
Ongoing charge remains, at 0.44%, the lowest in the sector. The Board has reviewed the Company's management fee arrangements with a view to simplifying these and making the Company more attractive to a wider audience of retail investors. With effect from 1 July 2013 the performance fee element of the management fee arrangements has been removed.  The management fee will henceforth be 0.365% per annum of net assets, reducing to 0.35% on the balance of net assets above £1 billion. (City of London previously levied a performance fee if it outperformed its benchmark by 15% or more over a rolling three year period, capped to a maximum management fee of 0.65% of net assets.)

As a result, CTY will continue to have one of the lowest ongoing charges in the UK Growth and Income sector and is extremely competitive against other equity investment alternatives.

The portfolio performance benefited from underweight positions in the oil and mining sectors, allied with overweight position in industrial engineering - notably IMI which returned 54%. Other significant contributors were housebuilder Persimmon and holiday firm Tui Travel which both returned over 100%, Standard Life 60% and betting firm William Hill with 73%. Share selection accounted for 4.1% of out-performance over the FTSE and gearing a further 2.1%.

Over the year there was a 4% reduction in the weighting in large companies with medium-sized companies increasing by 3% and overseas listed by 1%.  Large companies (FTSE 100) now account for 76% of the portfolio, medium companies 16% and overseas-listed companies, 8%.

I first purchased CTY for my personal equity plan (PEP) in 1995. I now hold in both my ISA and Sipp drawdown portfolios. It feels like a dependable, faithful old carthorse. Maybe that's where Slow & Steady Steps.. comes from!!

No comments:

Post a Comment