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City of London increases dividend for 53rd consecutive year

CTY : City of London writes to shareholders of Lazard World Trust

City of London increases dividend for 53rd consecutive year – City of London Investment Trust (CTY) has reported annual results covering the year to 30 June 2019. CTY delivered an NAV total return of 2.7%, outperforming its market and sector benchmarks, while the dividend was increased (by 5.1%) for the 53rd consecutive year.

Performance highlights 

2019 2018
NAV per share 2.70% 6.30%
Share Price 3.00% 6.20%
AIC UK Equity Income sector (Benchmark) -0.80% 6.30%
FTSE All-Share Index 0.60% 9.00%
IA UK Equity Income OEIC sector -2.60% 6.20%

Outlook

Philip Remnant CBE, chairman of CTY, discussed the fund’s outlook: “The record low level of 10 year bond yields, with Japan and several European countries in negative territory, indicates the considerable uncertainty about economic growth prospects. The growth of internet commerce is having a deflationary impact globally. Rising trade tariffs are likely to reduce growth and the outcome of the disputes between the US and its various trading partners is uncertain. While the UK economic growth rate has fallen over the last year, in common with other European countries, there are positive aspects, notably the strength of the labour market with record numbers in work.

The path of the UK’s future relationship with the European Union remains unclear but a general election is now imminent. In conjunction with our managers, we have continued to consider the direct practical consequences of Brexit on the operations of CTY and do not consider them to be material. To the extent that concerns about Brexit continue to put pressure on sterling, this would be a positive for CTY ‘s portfolio given the predominance of international companies where profits and dividends will increase when translated from overseas currencies into sterling. On the other hand, a resolution of Brexit could help investment in the UK as businesses and investors gain greater clarity.

CTY’s portfolio is predominantly invested in large, international companies. The dividend yield of our portfolio is much higher than fixed interest yields and bank deposit rates. We have a 53 year record of annual dividend increases and we are confident of continuing our record given the quality of the companies in which we are invested and the advantages which our closed end, investment trust structure gives us.”

CTY: City of London increases dividend for 53rd consecutive year

 

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