REG - City of Lon Inv Grp - Trading Update - Quarter to 30 September 2025

City of London InvestmentAnnouncement

Today 07:00

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20251020:nRST9165Da&default-theme=true

RNS Number : 9165D  City of London Investment Group PLC  20 October 2025

City of London Investment Group PLC

20 October 2025

 

 

CITY OF LONDON INVESTMENT GROUP PLC

("City of London" or "the Group" or "the Company" or "CLIG")

TRADING UPDATE FOR THE QUARTER TO 30 SEPTEMBER 2025

 

City of London (LSE: CLIG), a leading specialist asset management group
offering a range of institutional and retail products investing primarily in
closed-end funds ("CEFs"), provides a trading update for its quarter ending 30
September 2025. The numbers that follow are unaudited.

 

Funds under Management ("FuM") increased by 4% to $11.2 billion as of 30
September 2025 as compared to $10.8 billion as of 30 June 2025.

 

Investment Management Performance for quarter ended 30 September 2025

Overall performance of CLIM strategies continued to be solid, with particular
areas of  strength indicated in the table below:

 

 CLIM strategies        Performance  Benchmark  Difference
 Emerging Markets       +13.8%       +9.6%      +420bps
 International Equity   +7.0%        +6.9%      +10bps
 Opportunistic Value    +2.2%        +4.1%      -190bps
 Listed Private Equity  +13.7%       +1.9%      +1180bps

*The above returns are presented as net of fee performance figures. The CLIM
Global Emerging Markets strategy is shown against the S&P Emerging
Frontier Super Composite BMI Net TR Index, the CLIM Global Developed CEF
International Equity Strategy is shown against the MSCI ACWI ex-US Net TR
Index, the CLIM Opportunistic Value Strategy is shown against the Blended
50/50 MSCI AWCI/Bloomberg Global Aggregate Bond Index, and the CLIM Listed
Private Equity Strategy is compared to an 8% annual hurdle rate. Data is as of
30 September 2025. Past performance is no guarantee of future results.

 

Emerging markets equities as an asset class performed well over the quarter
and outperformed the broader global averages. This was led by the Chinese
market which returned 20.7% in US dollar terms as measured by the MSCI China
Index. CLIM's Emerging Markets ("EM") strategy continued its impressive recent
spate of relative returns, outperforming its benchmark significantly over the
quarter. The strategy benefited from its country allocation where overweight
positioning in Mexico and South Korea, underweight positioning in India and
out of benchmark exposure to Vietnam was particularly additive. Similarly,
Chinese exposure also aided performance, while the strategy remains broadly
neutral in terms of exposure relative to the benchmark, a bias towards smaller
cap Chinese exposure and technology sector exposure contributed to
outperformance. In South Korea, the government's desire for improving
corporate governance albeit at its early stages, continued to benefit our
positioning in a number of locally listed holding companies. Finally, the
strategy benefited from some discount catalysts during the period as well as
ongoing discount volatility. There remains a long pipeline of future corporate
events within our universe of securities and we expect the strategy to
continue to take advantage of these opportunities, creating sustainable,
long-term outperformance which compounds attractively for our clients.

 

CLIM's Listed Private Equity strategy also produced favorable returns over the
period. Most holdings produced at least positive single digit returns.
However, returns were particularly enhanced by announcements of corporate
events from two holdings, including the strategy's largest holding, which
resulted in significant price appreciation and returns for the period in
excess of 30% in US dollar terms. The universe continues to offer an
attractive investment proposition and we continue to see interest from
allocators looking to either manage their overall J-Curve exposure to private
equity or as a listed and liquid component to their private markets
allocations.

 

The International Equity strategy posted strong absolute returns during the
period, returning just in excess of the benchmark return. Country and sector
allocation were positive contributors, notably overweight exposure to China
and Emerging Asia and an underweight to Europe ex-UK while a Japanese
overweight also helped, particularly from investments that provided exposure
to small caps. This was offset by small cap exposure elsewhere, particularly
in the UK and Europe ex-UK, which took a breather following gains in the first
half of the year. Discount volatility also benefited returns and, as with the
Emerging Markets strategy, there remains a significant pipeline of corporate
opportunities to take advantage of in coming months and years.

 

Finally, the Opportunistic Value strategy was a laggard over the quarter on a
relative basis but still positive on an absolute basis. While the portfolio
remains heavily exposed to event driven, asymmetric return situations, this
exposure is biased to alternatives and as a result the portfolio has a lower
equity beta versus the benchmark. Given robust equity returns over the period,
this hurt relative performance.

 

KIM's main strategies performed largely in line with benchmarks over the
quarter.

 

 KIM strategies              Performance  Benchmark  Difference
 Growth Balanced             +5.41%       +5.37%     +4 bps
 Conservative Balanced       +4.28%       +4.21%     +7 bps
 Tax-Sensitive Fixed Income  +2.95%       +3.00%     -5 bps
 Taxable Fixed Income        +2.09%       +1.91%     +18 bps
 Cash Management             +1.04%       +1.12%     -8 bps
 Equities                    +6.91%       +7.73%     -82 bps

*The KIM Fixed Income Strategy is shown against the Bloomberg
Government/Credit Bond Index, the KIM Tax-Sensitive Fixed Income Strategy is
shown against the Bloomberg Municipal Bond Index, the KIM Growth Balanced
Strategy is shown against the Blended 40% Bloomberg Government/Credit Bond
Index/39% Russell 3000 Index/21% MSCI ACWI ex USA Net TR Index.  The KIM
Conservative Balanced Strategy is shown against the Blended 60% Bloomberg
Government/Credit Bond Index/26% Russell 3000 Index/14% MSCI ACWI ex USA Net
TR Index. The KIM Equities Strategy is shown against the Blended 65% Russell
3000 Index/35% MSCI ACWI ex USA Net TR Index.  The KIM Cash Management
Strategy is shown against the ICE BofA 1-3 Year US Treasury Index.

 

Fixed Income Commentary

During the quarter, the 10-year US Treasury yield declined by 8 basis points,
while the yield on 10-year AAA municipal bonds fell by 29 basis points. Within
fixed income, key performance drivers included municipal bond CEFs, which
benefited from strong net asset value (NAV) appreciation and narrowing
discounts, as well as preferred securities and senior notes issued by CEFs and
business development companies (BDCs). Conversely, pre-acquisition SPACs
detracted from performance due to their shorter duration relative to the
benchmark. Additional performance tailwinds came from significant tender
offers executed near NAV and liquidations of CEFs. While short-term results
are important, KIM's long-term performance remains a standout and over the
past five years, the Taxable Fixed Income and Tax-Sensitive Fixed Income
strategies have outperformed their respective benchmarks by 6.24% and 3.49%
annually.

 

Equity Commentary

US equities posted a strong quarterly return of 8.16%, while international
equities gained 6.88%. Equity CEFs modestly underperformed, primarily due to
widening discounts and weaker NAV performance.

 

Flows

 

The first quarter was marked by client rebalancing, after strong performance
by our investment teams and as International and Emerging Markets outperformed
US equity markets. EM and International Equity strategies saw net outflows of
$197 million and $145 million, respectively. For context, total market &
investment performance of EM and International Equity strategies for the
quarter was $476 million and $160 million respectively (total $636 million).
The Growth and Conservative Balanced strategies (a combination of equity and
fixed income) and Taxable Fixed Income saw net outflows of $76 million over
this period. Net investment outflows totaled $419 million across the Group
during the quarter.

 

New mandates included $46 million in the Emerging Markets strategy. Inflows of
circa $66 million combined across the EM, International and Opportunistic
Value strategies, while inflows of $74 million were recorded in the various
Balanced and Fixed income strategies.

 

Persistent discount volatility and strong outperformance of the Group's
strategies continue to be the focus of marketing efforts with allocators.

 

A breakdown FuM by strategy is as follows:

 

                             FuM ($ million)

                             Jun-25 Actual  Inflows  Outflows  Net Flows  Market & investment performance      Sept-25 (estimate)

 CLIM
 Emerging Markets            3,674          50       (247)     (197)      476                                  3,953
 International Equity        2,486          13       (158)     (145)      160                                  2,501
 Opportunistic Value         309            3        (6)       (3)        5                                    311
 Listed Private Equity       218            -        -         -          27                                   245
 Other*                      150            -        -         -          34                                   184
                             6,837          66       (411)     (345)      702                                  7,194
 KIM
 Growth Balanced             1,419          25       (63)      (38)       72                                   1,453
 Conservative Balanced       1,143          11       (29)      (18)       51                                   1,176
 Tax-Sensitive Fixed Income  528            22       (13)      9          14                                   551
 Taxable Fixed Income        707            14       (34)      (20)       16                                   703
 Cash Management             101            2        (8)       (6)        -                                    95
 Equities                    79             -        (1)       (1)        6                                    84
                             3,977          74       (148)     (74)       159                                  4,062
                             10,814         140      (559)     (419)      861                                  11,256

* Includes Frontier and alternatives

Funds under Management figures are rounded

 

Leadership Update

As previously mentioned, we are focused on broadening our leadership teams and
this initiative is advancing well. In his capacity as Chairman, Rian Dartnell
is working closely with the Board to evaluate CEO candidates and we have made
considerable progress. Further updates will be made in due course.

 

Dividend

 

On 16 September 2025 the Company (LSE: CLIG) announced a final dividend for
the year ended 30 June 2025 of 22p per share. Subject to approval at the AGM
on 27 October 2025, this will be paid on 6 November 2025 to shareholders on
the register as at 26 September 2025. This will bring the total dividend for
FY 2025 to 33p (FY 2024: 33p).

 

For further information, please visit https://www.clig.com/ or contact:

 

Rian Dartnell, Chairman

City of London Investment Group PLC

Tel: 001-203-561-0450

 

Martin Green, James Hornigold, Louisa Waddell

Zeus Capital Limited

Financial Adviser & Broker

Tel: +44 (0)20 3829 5000

 

This release includes forward-looking statements, which may differ from actual
results.  Any forward-looking statements are based on certain factors and
assumptions, which may prove incorrect, and are subject to risks,
uncertainties and assumptions relating to future events, the Group's
operations, results of operations, growth strategy and liquidity.

 

Past performance is no guarantee of future results.

The information contained in this document is intended for infor-mation
purposes only. This document does not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor will any sale of a
security occur in any jurisdiction where such an offer, solicitation or sale
would be unlawful.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTFLFVRIALDLIE



            Copyright 2019 Regulatory News Service, all rights reserved