November Commentary - City of London

13/12/2017

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​UK equities produced a negative total return of 1.7% in November as measured by the FTSE All Share Index. The FTSE 100 Index of the largest companies returned a negative 1.8% underperforming the more domestic FTSE Mid 250 Index of medium-sized companies which returned a negative 1.2%. This is partly explained by the negative effect on the more international FTSE 100 Index of the 0.5% rise in trade weighted sterling on hopes of moving towards the second stage of the EU exit negotiations. In the Budget, the UK economic growth forecast was downgraded due to lower productivity assumptions.

Within the UK stock market, the mobile telecoms sector was a notably strong performer after good interim results from Vodafone where City of London has a large holding. The growth in mobile data is having an increasingly positive impact on its operations in the UK and Europe. In addition, a new holding was bought in Orange (formerly France Telecom) which is experiencing better trading conditions in France. By contrast, Centrica was a notably weak performer after a profits downgrade for its energy supply operations in both the UK and the US. The Trust retained a small holding given the reduced share price valuation. In real estate investment trusts, the holding in Hansteen was sold after a strong share price performance following the sale of its European portfolio.
 
UK equities should continue to benefit from the synchronised growth being experienced by the world economy. The dividend yield from UK equities remains attractive relative to the main alternatives.

Past performance is not a guide to future performance. 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.


Important information

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

The City of London Investment Trust plc

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.

Past performance is not a guide to future performance. 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. Tax assumptions and reliefs depend upon an investor’s particular circumstances and may change if those circumstances or the law change.

Nothing in this document is intended to or should be construed as advice. This document is not a recommendation to sell or purchase any investment. It does not form part of any contract for the sale or purchase of any investment.

Issued in the UK by Janus Henderson Investors. Janus Henderson Investors is the name under which Henderson Global Investors Limited (reg. no. 906355), Henderson Investment Funds Limited (reg. no. 2678531), AlphaGen Capital Limited (reg. no. 962757), Henderson Equity Partners Limited (reg. no.2606646), (each incorporated and registered in England and Wales with registered office at 201 Bishopsgate, London EC2M 3AE) are authorised and regulated by the Financial Conduct Authority to provide investment products and services. We may record telephone calls for our mutual protection, to improve customer service and for regulatory record keeping purposes.

Specific risks

  • Where the trust invests in assets which are denominated in currencies other than the base currency then currency exchange rate movements may cause the value of investments to fall as well as rise
  • If a fund is a specialist country-specific or geographic regional fund, the investment carries greater risk than a more internationally diversified portfolio
  • Not all the investments in this portfolio are made in Sterling, so exchange rates could affect the value of and income from your investment

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Fund name changes

Please note that from the 15 December 2017 funds previously named Janus or Henderson have been renamed Janus Henderson. This change aligns our product names with our name, Janus Henderson Investors, following the merger of Janus Capital and Henderson Global Investors in May 2017.

This name change does not impact on the management of the underlying funds and investors and advisers are not required to take any action. This does not affect Janus Henderson’s range of investment trusts.