REG - CQS New City HighYld - MONTHLY FACTSHEET AS AT 28 FEBRUARY 2025

CQS New City High Yield FundAnnouncement

28/03/2025 07:15

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RNS Number : 5801C  CQS New City High Yield Fund Ltd  28 March 2025

28 March 2025

CQS New City High Yield Fund Limited

("NCYF" or the "Company")

Monthly Factsheet as at 28 February 2025

The Company's Fact Sheet as at 28 February 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 28 February 2025.

Ian 'Franco' Francis, Investment Manager at New City High Yield Fund comments:

In the UK, the effects of the October budget - increases to minimum wage,
National Insurance and business rates - are starting to be felt ahead of
implementation in April with many companies putting price increases in place
to offset rises in input costs. The private sector is also increasing the rate
of job cuts, with employment falling sharply in February. One in three
companies cited that job cuts are a direct result of the costs incurred from
the budget. UK inflation hit 3% in January and is forecast to increase in the
coming months. Overall demand in the economy was flat and is still skewed in
favour of the service sector. Adding the inflationary element means that we
see stagflation as a clear and present danger which will likely cause problems
for the Bank of England in the coming months.

In Europe, economic output is also flat with the service sector marginally in
growth and only just compensating for the weak manufacturing sector. Service
sector inflation is still at a high level, including above average wage cost
inflation, and this will likely be a concern to the European Central Bank
(ECB). Recent increases in energy prices also add to input costs pointing to
possible future inflation. It is quite possible that the ECB will keep rates
on hold for now. We believe the major risks to European economies comes both
from US tariffs and the increasing cost of defence. The latter is a result of
the US putting increased pressure on Europe to spend a much larger percentage
of GDP in their defence budgets.

In the US, business activity stuttered in February as the service sector
witnessed weak new order growth and suppressed future order expectations, all
related to uncertainty in future federal government policies. The relative
strength in manufacturing was partially due to the front-running of expected
tariffs with future orders and this was particularly noticeable in
export-focused companies. Surveys suggest that optimism for future growth has
fallen dramatically from the near 3-year highs at the beginning of January.
This is a result of concerns on federal policies comprising spending cuts and
tariffs, as well as ongoing geopolitical events. Although US inflation is
currently muted, the tariffs will undoubtedly have a knock-on effect to the
manufacturing sector by increasing inflation and squeezing profit margins.

The Company paid its second interim dividend of 1p/share on 21 February 2025.

For the Company's portfolio we continued to sell the Diversified Energy
equity, we had a partial redemption of Booster Precision 10.812933% and a full
redemption on Hoist Finance 7.75% perpetual bonds. We also downsized the
Company's holding in Co-Op Bank 11.75% 2034 - well above par - and reinvested
into the new issues of UTB 13% perpetual and Azamara Cruise line 11.5% 2030.

Looking ahead, the nature of President Trump's use of weaponised tariffs is
expected to give markets increased volatility and the current state of
geopolitics will likely add currency volatility to the mix.

-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 813 913

 BNP Paribas S.A., Jersey Branch

 Priya Mooroogen

 

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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