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City of London Investment Trust: March 2022 update

Senior Investment Analyst Joseph Hill shares our analysis on the manager, process, culture, cost and performance of City of London Investment Trust.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

  • Job Curtis is one of the most experienced UK equity income investors and began managing this investment trust in 1991
  • Curtis is part of a large and experienced team of income investors at Janus Henderson Investors
  • The trust aims to provide long-term growth in income and capital by mainly investing in large UK companies

How it fits in a portfolio

City of London Investment Trust aims to provide long-term growth in income and capital by mainly investing in large UK companies. Job Curtis looks for companies that generate plenty of cash to pay dividends and are conservatively run, in his view. This trust could form part of an income portfolio or a broader portfolio looking to add investment in larger UK companies.


Job Curtis has managed City of London Investment Trust since July 1991. This length of tenure is rare to see. He began his career in 1983 as a graduate trainee at Grieveson Grant stockbrokers, before joining Cornhill Insurance as an assistant fund manager from 1985 to 1987 and then Touche Remnant as a unit trust and investment trust manager. Following Henderson’s acquisition of Touche Remnant he subsequently joined Henderson in 1992. He works within a well-resourced and experienced team which includes highly regarded income investors such as Alex Crooke, Ben Lofthouse and James Henderson.

David Smith has also been appointed as deputy fund manager of the trust. Smith has managed the Henderson High Income Trust plc since 2013 and of the UK portfolio of The Bankers Investment Trust plc since 2017 and has worked with Job Curtis for a number of years.


The trust invests in good quality, well-managed companies, which can be bought at a reasonable share price and contribute to the trust’s dividend. He believes companies with sustainable and rising dividends will see their share prices grow over time. He likes larger, more stable companies which often have multinational operations that are robust enough to weather economic storms and still pay dividends. This provides UK investors with exposure to global growth through the portfolio’s overseas revenues.

Curtis mainly invests in UK companies, although he can invest up to 20% overseas when he finds good opportunities. As of 28 February 2022, 14.5% of the trust was invested overseas. This is mostly in US, Switzerland, Germany and France.

In 2021, many companies benefitted from strong economic growth in the UK as the economy rebounded from the Covid induced troubles that have plagued the last few years. This follows the sharp fall in GDP in 2020 when the pandemic and lockdowns started.

In recent months, Curtis has made some changes to the portfolio. In the final quarter of 2021 he sold out of Daily Mail and General Trust after the private takeover bid which subsequently saw the business go private for the first time since 1932. Other stocks that departed from the fund included transport operator Go Ahead and shopping centre owner Hammerson which were sold in favour of better opportunities after disappointing performance. Curtis has added some new positions too. In recent months, investment company 3i and international building materials group Holcim were added with the latter expected to benefit from infrastructure spending in both developed and higher-risk emerging markets. In January, Curtis bought the logistics company Wincanton, which features in the FTSE Small Cap index for the trust after it reported strong trading across its business.

Investors should be aware the trust can borrow money to invest with the intention of increasing returns (known as gearing), but this could magnify losses in a falling market and increases risk. The manager can also use derivatives, which if used adds risk.


Janus Henderson Investors is a large investment firm with offices all over the world. It was formed in 2017 from the merger of two long-established groups – US-based Janus Capital Group and Henderson Global Investors.

It values experience, and so fund managers at the group have on average over two decades of investment experience. Sharing knowledge and ideas between investment teams is an important part of the culture. Managers have the flexibility to tap into the wider group’s resources for ideas and insights, but also have the freedom to do their own research and form their own views without having a ‘house view’ placed on them.

Curtis integrates environmental, social and governance (ESG) factors into his company analysis. As a long-term investor, he believes this helps to highlight businesses that use more sustainable practices and could thrive over the long term. This could drive long term dividends and it could also uncover risks that are less obvious through more traditional company analysis. There is an ESG team at Janus Henderson to assist and there is also a dedicated ESG analyst within this team.


The ongoing annual charge over the trust’s financial year to 30 June 2021 was 0.38%. Investors should refer to the latest annual reports and accounts, and Key Information Document for details of the risks and charging structure. If held in a SIPP or ISA the HL platform fee of 0.45% per annum (capped at £200 per annum for a SIPP and £45 for an ISA) also applies. Our platform fee doesn’t apply if held in a Fund and Share Account.

Part or all of the annual charge is taken from capital rather than income generated. This could result in a higher dividend yield but can limit capital growth.


The trust has performed strongly over the manager’s tenure which began in 1991 and is ahead of the FTSE All Share index. In addition, the company has increased the dividend it pays every year since 1966, which is the longest record of any UK investment trust. As always, past performance isn’t a guide to the future. Dividends are variable and not guaranteed.

In early 2020 the speed and scale of the Covid-19 crisis had an immediate impact on dividends. Some of the natural hunting grounds for income, such as banks and oil, were hit hard as the pandemic reduced demand for travel and damaged economic growth. But 2021 was a much better year for the UK market and saw the return to some sort of normality despite the curveball presented by the Omicron Coronavirus variant.

Dividends have long been a key element of the UK market and we expect this to continue. In the year to the end of June 2021 the trust paid dividends totalling 19.1p per share, a 0.5% increase from the prior year. The growth of dividends paid by companies in the UK is expected to slow in 2022 to just 2% after a strong bounce back in 2021. Banking and recovering oil dividends are expected to be the main engine of 2022 dividend growth in the UK with companies likely to face a number of headwinds including dealing with high inflation.

Over the last 12 months to the end of February 2022, the trust’s share price returned 19.31%* vs the FTSE All Share return of 16.03%. Over the same period the trust’s NAV rose 21.71%. At the time of writing the trust trades at a premium of 1.70% and has a dividend yield of 4.68%, although remember yields are variable and aren’t a reliable indicator of future income.

Annual percentage growth

Feb 17 – Feb 18 Feb 18 – Feb 19 Feb 19 – Feb 20 Feb 20 – Feb 21 Feb 21 – Feb 22
City of London Investment Trust Plc 3.20% 2.50% -0.65% -1.74% 19.31%
FTSE All-share 4.40% 1.70% -1.43% 3.5% 16.03%

Past performance is not a guide to the future. Source: *Lipper IM to 28/02/2022.



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    Important notes

    This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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