For financial professionals in the UK

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

Job Curtis, Portfolio Manager of The City of London Investment Trust, provides an update on the Trust, highlighting factors currently affecting the UK market, the key drivers of performance in July, and outlines recent portfolio activity.

Job Curtis | Janus Henderson Investors
Job Curtis, ASIP

Job Curtis, ASIP

Portfolio Manager

26 Aug 2022
2 minute read

Macro backdrop

The UK equity market returned 4.4%, helped by favourable corporate results from the first six months of 2022. UK inflation hit a new 40-year high of 9.4% in June, up from 9.1% in May, while the UK economy unexpectedly grew by 0.5% in May, after shrinking 0.2% in April.¹ Within the equity market, the FTSE 250 Index of medium-sized companies outperformed with a total return of 8.3%.²

Trust performance and activity

The Trust produced a total return of 2.9%, underperforming the FTSE All Share Index which returned 4.4%. This underperformance was partly due to the portfolio being predominantly invested in large companies.²

The two biggest stock detractors were the holdings in motor insurers Direct Line and Sabre, where premiums have not kept pace with the rising cost of claims. Notable positive contributors included holdings in Ibstock, the brick maker, and IG Group, the online trading company, which both reported better-than-expected results.³ In terms of activity, we bought a new holding in NatWest, which has been benefiting from rising interest rates and bond yields, and also announced a special dividend.


City of London has a diversified portfolio with positions in sectors that we think are well positioned to cope with current inflationary pressure, such as consumer staples and oil. In addition, it has significant holdings in financial sectors, where rising interest rates and bond yields are typically a helpful tailwind. In general, satisfactory profits and dividends were announced in the recent corporate reporting season while the yields found on UK equities remains attractive relative to the main alternatives.

¹Source: UK inflation rate rises to 40-year high of 10.1% | Financial Times ( ²Source: Bloomberg asat 31 July 2022 ³Source: NatWest Share Price (LON:NWG) Rallies After Earnings Beat, Special Dividend -Bloombergand Ibstock defies supply chain challenges to build healthy profit | CTY July 2022(1) Glossary Expand

Inflation – The rate at which the prices of goods and services are rising in an economy. The CPI and RPI are two common measures. The opposite of deflation.

Yield – The level of income on a security, typically expressed as a percentage rate. For equities, a common measure is the dividend yield, which divides recent dividend payments for each share by the share price. For a bond, this is calculated as the coupon payment divided by the current bond price.

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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