The City of London has grown its dividend every year since 1966 – the longest record of any investment trust.


An investment trust advantage


Henderson City of London


One of the Trust’s strategic aims is to provide a growing stream of income for its investors by investing in companies that are well financed, offer a strong competitive advantage and demonstrate a history of stable cash-flows and rising dividends.

The investment trust structure helps to achieve this aim: unlike open-ended vehicles which must pay out all of the income they receive from underlying holdings, a UK-domiciled investment trust is permitted to retain up to 15% of its annual income and pay it into a reserve account.

It means that during more plentiful years a small percentage of the dividend payments can be put aside, so that during lacklustre years, for example in an economic downturn, the fund manager is able to use the reserve to top-up the dividend it pays investors and smooth the income stream over time.

While not a guide to the future, this has enabled City of London to grow its dividend every year since 1966 – the longest record of any investment trust!
Job Curtis has been managing the Trust since 1991.


A good investment for the long term?


We believe investing over the longer term serves to mitigate some of the short-term risks and volatility inherent in equity markets, and can maximise your potential returns.

The City of London Investment Trust aims to unlock value in equities on a medium to long-term basis, and may be of interest to investors looking to gain UK stock market exposure through a broad, conservatively managed portfolio of blue-chip investments.

Looking back over the past 50 years, short term investors may have been unnerved by any number of macroeconomic events: the 73/74 bear market, the winter of discontent, severe unemployment, interest rates hikes to 15%, ‘Black Monday’, ‘Black Wednesday’, The Asian Financial Crisis, the dotcom crash, or the Global Financial Crisis; all potentially leading to performance damaging withdrawals in the process.

The chart below demonstrates the performance of £100 invested 50 years ago in various assets, including The City of London, and run through to the present day.

Henderson chart

Source: Henderson Global Investors, Barclays; as of July 2015. Top to bottom: Barclays Equity Index Total Return; Gilt Total Return (UK government bonds); the Retail Prices Index (a measure of inflation); and City of London Total Return.


City of London


Henderson Chart 2


Adjusted for inflation, £100 in cash would be worth £1662 today; with income reinvested, £100 put into gilts would have handed back just under £7k; a broad basket of UK equities would have earned you nearly £27k; and £100 into the City of London would have earned just over £56k. Whatever your investment, you would have achieved the best outcome with a long term approach. However, please consider that past performance should not be used as a guide to future performance.


Low charges


Charges can be a significant drag on performance, a fact sometimes ignored by investors. For example, using a simple mathematical model, a £10,000 investment growing at 6% for 30 years would be worth around £51,000 in a fund charging 0.4%, but only £42,500 in an identical fund charging 1%.

Due to its size and its ability to spread its costs among a large base of investors, City of London’s ongoing charge is the lowest in its sector, at just 0.43% per year.


So why consider City of London?


  • While not a guide to the future, it has weathered a myriad of economic events and market turmoil through its conservative, blue-chip investments, and presents a potentially good investment for the long term.
  • It has the longest growing dividend record of any investment trust, aiming to provide a smooth stream of income to its investors.
  • It has the lowest ongoing charge of any investment trust in its sector, reducing the drag to potential future performance.




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.

The trust may use gearing as part of its investment strategy. If the trust utilises its ability gear, the profits and losses incurred by the trust can be greater than those of a trust that does not use gearing.

If a fund is a specialist country-specific or geographic regional fund, the investment carries greater risk than a more internationally diversified portfolio.

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.

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.
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 Henderson Global Investors. Henderson Global Investors is the name under which Henderson Global Investors Limited (reg. no. 906355), Henderson Fund Management Limited (reg. no. 2607112), Henderson Investment Funds Limited (reg. no. 2678531), Henderson Investment Management Limited (reg. no. 1795354), AlphaGen Capital Limited (reg. no. 962757), Henderson Equity Partners Limited (reg. no.2606646), Gartmore Investment Limited (reg. no. 1508030), (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.



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