City of London Investment Trust bounces back but lags benchmark

(Alliance News) - City of London Investment Trust PLC on Tuesday said it underperformed against ...

Alliance News 21 September, 2021 | 9:11AM
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(Alliance News) - City of London Investment Trust PLC on Tuesday said it underperformed against its benchmark index in its recently ended financial year, but hailed its recovery and lifted its payout.

The trust's net asset value total return was 20.0% for the year to June 30, lagging its benchmark, the FTSE All-Share Index, which returned 21.5%. However, Chair Laurie Magnus called it a "decent recovery" after a negative return of 14.6% in the 2020 financial year.

"City of London was behind relative to the FTSE All-Share Index over the year under review by 1.5%, but ahead over the last six months of the period by 1.2%," the company, which mainly invests in London-listed equities, highlighted.

NAV per share stood at 387.62p at the end of June, up from 343.96p a year ago.

"Following the avalanche of dividend cuts, cancellations and omissions during the second quarter of 2020, there was a marked improvement over the 12 months to 30 June 2021," said City of London IT.

The company said October 2020 was a "pivotal moment" in the financial year, when Covid-19 vaccines were confirmed to work well - sparking a stock market rally.

City of London IT increased its dividend by 0.5% to 19.1p for the year, representing the 55th year of consecutive increases.

Looking ahead, it said: "Dividend declarations by some of our investee companies during the last quarter of the 12 month period and during the first two months of the next financial year have been particularly encouraging and, if sustained, will materially improve our full year revenue return next year.

"Given this, together with the quality of the companies in our portfolio and the advantages of our closed-ended investment trust status, we are confident of building on City of London's unique 55-year record of annual dividend increases and of continuing to provide reliable returns."

Shares in City of London IT were up 1.6% at 386.75p in London early Tuesday.

By Lucy Heming; lucyheming@alliancenews.com

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
City of London Ord 386.50 GBX 0.26

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