Would you heed a ‘wealth warning’ on fund charges? Would you buy and renovate a city of london investment trust isa in France? Will workers stand for a tripling in pension deductions from wage packets, or rebel against auto-enrolment increases?
All that was missing last Wednesday were the fireworks as the board of The City of London Investment Trust took time out to celebrate the fund’s remarkable success story. First, its extraordinary ability to sustain a growing dividend for 50 years, a record unrivalled in the investment funds industry. Second, recognition of the role manager Job Curtis has played in delivering a mix of income and capital growth. Curtis, part of a 12-strong global equity team at asset manager Henderson, has managed the trust for 25 years. The trust’s performance figures speak for themselves. Over the past one, three, five and ten years, it has outperformed the average of its UK equity income peer group.
Over the same periods, it has also beaten the FTSE 100 and FTSE All-Share indices. Over the past ten years, for example, it has returned 129 per cent, against 61 per cent from the Footsie and 71 per cent from the All-Share. Managing it is not about hitting proverbial sixes out of the ground. It’s to do with scampering singles and quietly building a long-term investment record. Familiar dividend-friendly names dominate its 117-stock portfolio, including British American Tobacco, HSBC and Vodafone. Johnson, Microsoft and Swiss healthcare giant Novartis.
We hold these shares because it helps us diversify the sources of the trust’s income,’ says Curtis. Although the dividend outlook in the UK is grim, he is not overly concerned. The fund also has just over half a year’s income in reserve, which can be drawn upon if dividend inflows dip. It means investors’ returns are not denuded by high charges. While Curtis, 54, says he loves managing the trust, he is keen to praise the rest of Henderson’s global equity team, who he says all play a role in dictating the fund’s direction. If a bus runs me over tomorrow, there are plenty of individuals at Henderson capable of keeping the trust on track,’ he says.