REG - CQS New City HighYld - Monthly Fact Sheet as at 31 March 2025

CQS New City High Yield FundAnnouncement

17/04/2025 07:00

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RNS Number : 3478F  CQS New City High Yield Fund Ltd  17 April 2025

17 April 2025

CQS New City High Yield Fund Limited
("NCYF" or the "Company")

Monthly Factsheet as at 31 March 2025

The Company's Fact Sheet as at 31 March 2025 has been submitted and is
available for inspection on the Company's
website, https://ncim.co.uk/cqs-new-city-high-yield-fund-ltd/
(https://ncim.co.uk/cqs-new-city-high-yield-fund-ltd/) .

The investment manager updates on the wider macro-economic environment and on
key changes to the portfolio positions as at 31 March 2025.

Please Note: This report covers March 2025, pre the "Liberation Day" tariffs
from President Trump and subsequent market gyrations.

Market focus in the UK in March centred around the Chancellor's Spring
Statement. It included welfare cuts and large cuts to be made from all
government departments with the hope of saving 15% in administration costs by
2030, including a reduction in the headcount by 10,000 jobs. Also included was
a major increase to the defence budget as a result of the increased Russian
threat and lessening support of the US to its NATO allies. The latter element
is to be funded by the decrease in the overseas aid budget from 0.5% to 0.3%
of gross national income by 2027. What rang the most alarm bells was the
Office for Budget Responsibility (OBR) cutting 2025 growth forecasts from 2%
to 1% and forecasting 3.2% average inflation for 2025. These forecast cuts
point to the danger of possible stagflation unless the private sector can
increase efficiency over and above the inflation-busting rises in minimum
wages, National Insurance and business rates arriving in April. This is not
likely to be an easy task with President Trump announcing 25% tariffs on all
imported vehicles from the 2(nd) April, coming soon after Rachel Reeves Spring
Statement, which could put a potentially large dent in UK exports; just when
export earnings are needed the most. At the time of writing, the raft of
tariffs expected on 2(nd) April had not been announced. Further comments from
the OBR suggested a close-to-even chance of the spending targets being met.
They put the chances of the UK keeping within the spendings target at 54% and
the other rule for minimising public debt at 51%.(1)

The European economy appeared to witness the first green shoots of recovery in
early to mid-March. The standout element was the manufacturing sector which
grew for the first time in nearly 3 years. Meanwhile, the services sector hit
a seven-month high and, as a result, the period of rising unemployment dating
back to August 2024 seemed to be coming to an end. This is when measured
across the whole zone, although France and Germany were still experiencing
reductions in staff levels. European inflation was still falling, down to 2.2%
in March from 2.3% in February. European economies are increasing defence
spending across the board as the US is seen to be stepping back from its
support of European allies. This will have an ongoing positive effect on their
defence industries. On the 26(th) March, President Trump announced a 25%
tariff on all autos and auto parts being imported into the US. This will
likely have a large negative effect on Germany, France, Sweden, Slovakia and
Italy, and comes on top of the large dent being made on European auto
manufacturers by the influx of cheap and efficient electric vehicles (EV's)
from China.

The economy in the US appeared to fall back to a two-speed mode. It is still
showing good strength overall, but manufacturing fell back into decline as the
front running of potential tariffs increased output in January and February.
Overall business confidence has fallen to one of the gloomiest for the last
three years due to the spectre of future tariffs, major Federal spending cuts
and possible inflation as a result of these tariffs. Manufacturing has seen
its cost base increase at the fastest rate for two years and has been passing
on these inflated costs to their customer base. Fortunately, the service
sector remains at subdued levels, which will please the Federal Reserve when
they look to keep on track for future rate cuts. The main swathe of tariffs is
being announced on the 2(nd) April, and their extent and effects will be
covered in next month's factsheet. In March, 25% tariffs were imposed on
Canada and Mexico with a lesser 10% rate being applied to energy and potash.
For China, a further 10% was added on top of the 10% levied in February.

For the Company's portfolio, we continued to downsize the holding of Co-Op
Bank 11 3,4% 2034, with the proceeds being reinvested into Aareal Bank 9.875%
perpetual. We increased holdings of SP Cruises 11.5% 2030and reduced exposure
to Selecta Group 8% as a result of our change in view of the group's
prospects.

1 Source: Office for Budget Responsibility, 'Economic and fiscal outlook',
March 2025.

 

-ENDS-

 

 

 For Further Information

 CQS New City High Yield Fund Limited    T: +44 (0) 20 7201 6900

                                         E: contactncim@cqsm.com

 Singer Capital Markets                  T: +44 (0) 20 7496 3000

 Cardew Group                            T: +44 (0) 20 7930 0777

 Tania Wild                              M: +44 (0) 7425 536 903

 Henry Crane                             M: +44 (0) 7918 207 157

 Liam Kline                              M :+44 (0) 7827 130429

                                         E: ncyf@cardewgroup.com (mailto:ncyf@cardewgroup.com)

                                         https://www.cardewgroup.com/ (https://www.cardewgroup.com/)

 Company Secretary and Administrator     T: 01534 813 959

 BNP Paribas S.A., Jersey Branch

 Guerhardt Lamprecht

 

 

 

About CQS New City High Yield Fund Limited

 

CQS New City High Yield Fund Limited aims to provide investors with a high
dividend yield and the potential for capital growth by investing in
high-yielding, fixed interest securities. These include, but are not limited
to, preference shares, loan stocks, corporate bonds (convertible and/or
redeemable) and government stocks. The Company also invests in equities and
other income-yielding securities.

Since the Fund's launch in 2007, the Board has increased the level of
dividends paid every year. As at 31 December 2024, the Company's dividend
yield was 8.79%. In addition to quarterly dividend payments, the Fund seeks to
deliver investors access to a high-income asset class across a
well-diversified portfolio with low duration to help mitigate interest rate
risk.

Further information can be found on the Company's website
at https://ncim.co.uk/cqs-new-city-high-yield-fund-ltd/
(https://ncim.co.uk/cqs-new-city-high-yield-fund-ltd/)

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