REG - City of Lon Inv Grp - Trading Update - Six months to 31 December 2025

City of London InvestmentAnnouncement

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RNS Number : 3239P  City of London Investment Group PLC  19 January 2026

City of London Investment Group PLC

19 January 2026

 

 

CITY OF LONDON INVESTMENT GROUP PLC

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

SIX MONTHS TO 31 DECEMBER 2025 TRADING UPDATE

 

City of London (LSE: CLIG), a leading specialist asset management group
offering a range of institutional and retail products, provides a trading
update for the six months ended 31 December 2025. The numbers that follow are
unaudited.

 

Funds under Management ("FuM") increased by 4% to $11.2 billion as of 31
December 2025 as compared to $10.8 billion as of 30 June 2025. FuM growth has
continued into 2026 with assets totaling $11.6 billion as of 15 January
2026.

 

Investment Management Performance

Global markets resumed their risk-on phase in the second half of 2025.
Equities built on gains from the first half of the year as the MSCI ACWI TR
Index delivered an 11.4% return for the six months ending 31 December 2025.
Bonds were broadly flat with the Bloomberg Global Aggregate Total Return Index
gaining just 0.8% during the period. Commodities provided divergent
performance with gold surging 30.7% while Brent oil lagged with a fall of
4.6%.

 

CLIM strategies performed reasonably well as indicated in the table below:

 

 CLIM strategies        Performance  Benchmark  Difference
 Emerging Markets       +19.2%       +13.8%     +540bps
 International Equity   +11.9%       +12.3%     -40bps
 Opportunistic Value    +5.0%        +5.9%      -90bps
 Listed Private Equity  +20.1%       +3.9%      +1620bps

*The above returns are presented as net of fees 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
31 December 2025. Past performance is no guarantee of future results.

 

Emerging Markets ("EM") as an asset class built on outperformance from the
first half of the year to turn in a 13.8% return in the second half as
measured by the MSCI Emerging Markets TR Index:

 

 ·    These gains were led by South Korea and Taiwan whose markets
 benefited from their technology bias and in particular, the artificial
 intelligence ("AI") theme.
 ·    CLIM's EM strategy outperformed the benchmark by an impressive 540
 basis points. Performance was aided by strong country allocation as out of
 benchmark exposure to Vietnam and being underweight to the Indian market which
 underperformed were particularly beneficial.
 ·    The strategy also continued to benefit from a broad narrowing of
 closed-end funds ("CEF") discounts and corporate initiatives within the
 investment universe.
 ·    The CEF structure is arguably the best vehicle for delivering returns
 from active management and this was aptly demonstrated by strong net asset
 value ("NAV") performances over the period from several of our largest
 portfolio holdings.

 

International Equity and Opportunistic Value strategies posted modest
underperformance:

 

 ·    International Equity benefitted from discount narrowing and positive
 country allocation but its exposure to UK and European smaller companies
 detracted from returns.
 ·    Opportunistic Value captured significant upside from discount
 movements, but this was offset by weakness in several alternative funds' NAV
 performance as well as being underweight in equities relative to its
 benchmark.

 

Listed Private Equity performed strongly:

 

 ·    Performance was meaningfully boosted by a corporate action from its
 largest holding which resulted in a significant uplift.
 ·    As the universe continues to trade at a wide discount, it's not
 unreasonable to expect such corporate initiatives to remain a feature of the
 landscape.
 ·    Similarly, investee funds continue to deliver from a NAV perspective
 and are beginning to benefit from an increased level of realisations among the
 private equity universe generally.

 

 KIM strategies              Performance  Benchmark  Difference
 Growth Balanced             +8.0%        +7.9%      +10 bps
 Conservative Balanced       +6.3%        +6.2%      +10 bps
 Tax-Sensitive Fixed Income  +4.3%        +4.6%      -30 bps
 Taxable Fixed Income        +3.1%        +2.9%      +20 bps
 Cash Management             +2.0%        +2.3%      -30 bps
 Equities                    +10.1%       +11.3%     -120 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 six months, the 10-year US Treasury yield declined by 6
 basis points, while the yield on 10-year AAA municipal bonds fell by 48 basis
 points.
 ·    Within fixed income, key performance drivers included municipal bond
 CEFs, which benefited from strong NAV appreciation and narrowing discounts, as
 well as preferred securities and senior notes issued by CEFs and business
 development companies ("BDCs").
 ·    Conversely, while performing in line with our expectations,
 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 standout and over the past five years, the Taxable Fixed Income and
 Tax-Sensitive Fixed Income strategies have outperformed their respective
 benchmarks by 4.91% and 2.80% annually.

 

Equity Commentary

 ·    International equities returned 12.3% over the second half of 2025,
 outpacing US equities which returned 10.8%.
 ·    Equity CEFs modestly underperformed primarily due to poor NAV
 performance.  A modest overweight to US stocks also detracted from
 performance relative to the benchmark.

 

Flows

 ·    Strong market and investment returns over the six months led to net
 outflows from client rebalancing, asset allocation changes, and capital
 needs.
 ·    Net investment outflows were $853 million for the Group over the
 period, led by CLIM EM, International Equity and KIM Growth Balanced
 strategies.
 ·    Most client outflows were driven by two main factors:
 o  Portfolio rebalancing, where strong performance and asset‑allocation
 reviews prompted shifts back to target weights.
 o  Strategic or structural changes, such as pension funds reaching funded
 status and moving to liability matching strategies; consultant changes,
 particularly for OCIO clients, which often catalyse pre-determined manager
 changes; transitions to passive strategies resulting in the liquidation of
 active mandates and withdrawals to meet funding or cash‑flow needs for
 capital projects.

 

The majority of strategies are currently reporting higher FuM levels than at
the year end, reflecting the impact of favourable market conditions and
investment team performance. These results highlight the stability of the
portfolios during a period of mixed flow activity.

 

Investment teams have delivered measurable alpha across multiple strategies.

 

Even in this environment where some clients are taking profits, CLIM recorded
$100 million in gross inflows, driven primarily by continued demand for EM and
International Equity strategies. KIM recorded $147 million in gross inflows
predominantly across the Taxable Fixed Income, Tax Sensitive Fixed Income and
Growth Balanced strategies. This activity indicates sustained client
engagement with these offerings.

 

Persistent discount volatility and strong outperformance of the Group's
strategies continue to shape our marketing efforts, supported by a rising
level of interest in the markets where we offer our products.

 

A breakdown of FuM by strategy follows:

                             FuM ($ million)

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

 CLIM
 Emerging Markets            3,674          64       (575)     (511)      661                                  3,824
 International Equity        2,486          31       (216)     (185)      275                                  2,576
 Opportunistic Value         309            5        (10)      (5)        12                                   316
 Listed Private Equity       218            -        (38)      (38)       41                                   221
 Other*                      150            -        -         -          47                                   197
  Total CLIM                 6,837          100      (839)     (739)      1,036                                7,134
 KIM
 Growth Balanced             1,419          35       (106)     (71)       100                                  1,448
 Conservative Balanced       1,143          27       (47)      (20)       76                                   1,199
 Tax-Sensitive Fixed Income  528            35       (41)      (6)        179                                  701
 Taxable Fixed Income        707            42       (48)      (6)        (129)                                572
 Cash Management             101            7        (17)      (10)       3                                    94
 Equities                    79             1        (2)       (1)        10                                   88
  Total KIM                  3,977          147      (261)     (114)      239                                  4,102
  Total Group                10,814         247      (1,100)   (853)      1,275                                11,236

* Includes Frontier and alternatives

Funds under Management figures are rounded

 

 

 

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, 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.

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