For financial professionals in the UK

The City of London Investment Trust Fund Manager Commentary – February 2022

Job Curtis, ASIP

Job Curtis, ASIP

Portfolio Manager

10 Mar 2022
3 minute read

During February, the UK equity market produced a negative total return of 0.5%, as measured by the FTSE All Share Index. The outbreak of conflict in Ukraine led to a further rise in the price of oil and other commodities. Oil and mining companies also reported good financial results in respect of 2021, with pleasing dividend declarations. As a result, the FTSE 100 Index, which is made up of the largest UK listed companies and includes several oil and mining companies, outperformed with a return of 0.3% compared with a negative return of 3.7% for the FTSE 250 Index of medium-sized companies.

BAE Systems, the defence contractor where City of London has a stake, was a notable outperformer with a share price total return of 25% over the month. BAE reported good financial results and the importance of the products it makes was underlined by the terrible events in Ukraine. Mondi, the paper and packaging company where City of London has a shareholding, produced a negative return of 15%, reflecting its ownership of a plant in Russia, although the rest of its business is operating well.

A further reduction was made to City of London’s holding in BHP, the mining company, after exceptional long-term performance and with the end of its UK listing, being replaced by a full listing in Australia. A new holding was bought in Sanofi, the French headquartered, international, pharmaceutical company with key franchises in immunology, diabetes, cardiovascular and rare diseases. The quality of its likely future earnings growth appeared to be undervalued in its share price valuation. A new holding was also bought in Hays, the recruitment agency with main operations in the UK, Germany and Australia, which is trading well.

The conflict in Ukraine and heightened geopolitical tension is likely to continue to weigh on major equity markets. The rise in the price of oil and other commodities is leading to a further rise in inflation, adversely affecting consumer spending. Company profits and dividends have recovered well from the lockdowns of the economy during the pandemic. The dividend yield of the UK equity market is attractive relative to the main alternatives.

1Bloomberg as at 28/02/2022

These are the views of the author at the time of publication and may differ from the views of other individuals/teams at Janus Henderson Investors. References made to individual securities do not constitute a recommendation to buy, sell or hold any security, investment strategy or market sector, and should not be assumed to be profitable. Janus Henderson Investors, its affiliated advisor, or its employees, may have a position in the securities mentioned.


Past performance does not predict future returns. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.


The information in this article does not qualify as an investment recommendation.


Marketing Communication.






Important information

Please read the following important information regarding funds related to this article.

Before investing in an investment trust referred to in this document, you should satisfy yourself as to its suitability and the risks involved, you may wish to consult a financial adviser. This is a marketing communication. Please refer to the AIFMD Disclosure document and Annual Report of the AIF before making any final investment decisions.
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