City of London Investment Trust (LON:CTY) is a UK growth & income beast that has consistently delivered above average yield to its investors. Conservatively ran by the same manager for over 20 years, it boasts one of the lowest charging structures in the UK fund market.
I spoke to its manager to find out more...
City of London has come a long way since it was set up in 1860 as City of London Brewery to acquire the then renounced city brewing company of Calverts. To readers not from London, the City of London refers to the historic square mile to the east of London that houses St Paul’s cathedral and the financial district. So valuable was the property assets the brewery had within the City that it gave up brewing in the 1930’s and sold the land for vast profit. It is that profit that seeded funding to the renamed City of London Brewery & Investment Trust and led to today’s successful investment vehicle.
It wasn’t till the 1960’s that the connection to the brewing industry was discontinued altogether with the sale of the pubs the company owned. And it took till the early 70’s when the investment mandate moved to Touché Remant for the name to be changed again to reflect the new reality.
The next big change for the trust came in 1991 when Touché Remant were acquired by Henderson Global Investors and appointed John Curtis to the role of portfolio manager. After a series of mergers and acquisitions at Henderson where it became at one point the UK subsidiary of a large Australian insurer, it now resides in shiny new offices in Liverpool St in the heart of the City but still with John Curtis as the portfolio manager.
History is one of the fascinating stories many investment trusts have to tell but it is never a reason to invest. What might be a reason is 4 6 Y e a r s of unbroken dividend growth. Not only does City of London have the longest track record of dividend growth but it does it whilst paying a dividend that is around 25% more than the average of the market and its index the FTSE All-share with a current yield of 4.56%. That beats inflation hands down. And that’s not all, over…
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