For financial professionals in the UK

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

Job Curtis, ASIP

Job Curtis, ASIP

Portfolio Manager

13 Apr 2022

During March, the UK equity market produced a total return of 1.3%, as measured by the FTSE All Share Index. The FTSE 100 Index of the largest companies slightly outperformed, with a total return of 1.4%, helped by its exposure to the large oil companies, Shell and BP, which benefited from a further rise in the oil price to end the month at $105/bbl. In addition, the large pharmaceutical companies, AstraZeneca and GlaxoSmithKline, also outperformed with investors favouring their relatively defensive profits given the difficult outlook for the consumer with rising inflation. The FTSE 250 Index of medium-sized companies, which has a larger exposure to domestic cyclicals, underperformed with a total return of 0.6%.

City of London has large shareholdings in Shell, BP, AstraZeneca and GlaxoSmithKline, which were significant outperformers, but the portfolio has below average market exposure to those four stocks. The highlight of the month for City of London was its stake in Brewin Dolphin, the wealth manager, which returned 73%, after a takeover bid from Royal Bank of Canada.

UK housebuilders were notably weak in March, partly due to the Bank of England raising the Base Rate to 0.75%, but also due to a dispute with the Government over rectifying defective cladding on flats, even where they were not directly responsible. City of London maintained stakes in the housebuilders Persimmon, Taylor Wimpey and Berkeley. In our view, the fundamentals of the UK housing market are good with interest rates remaining low by historic standards and strong underlying demand for new homes. In addition, the dispute with the Government over the cost of rectifying defective cladding appeared to have been resolved in April.

The main action in City of London’s portfolio in March was to take some of the large profits made in Ferguson, the US distributor of building products, ahead of its move of prime listing from London to New York. The proceeds were reinvested across the portfolio.

The war in Ukraine and elevated geopolitical tension is likely to continue to weigh on global equity markets. Further rises in interest rates to counter inflation are another headwind. On the other hand, evidence of the relative value of UK equities continues to be demonstrated by the takeover bids from overseas companies, such as that for Brewin Dolphin by Royal Bank of Canada. In addition, the dividend yield of UK equities remains attractive relative to the main alternatives.

Bloomberg, as at 31/03/2022.

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.


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