City of London investment trust reduces management fee amid AUM growth
The trust's investment management fee was last reviewed and reduced in 2019 and, since then, its net assets under management grew by 48% to just over £2bn.
In its half-year results published today (16 February), the trust said its investment management fee was last reviewed and reduced in 2019 and, since then, its net assets under management have grown by 48% to just over £2bn.
As a result, the trust's board and its investment manager, Janus Henderson, agreed to reduce the investment management fee from 0.325% to 0.3%, effective from 1 January. This has led to the ongoing charge — comprising manager fees and administrative expenses — to be lower than 2023's 0.37%.
City of London has also introduced a second fee tier of 0.275% per annum based on net assets over £3bn.
City of London trust maintains share price premium despite underperforming UK market
In the six months to 31 December, the trust's NAV grew 6.5% to 401.7p per share, compared to a 5.2% return for the FTSE All Share and an average 5% return for the AIC Equity Income sector. However, CTY lagged behind the IA UK Equity Income OEIC sector average, which posted 6.9% returns over the period.
Stock and sector selection contributed 171 basis points to the trust performance, with the biggest contributors being underweight positions in pharmaceuticals and AstraZeneca, alongside overweight positions in REITs.
Yet, a fall in gilt yields in the second half of 2023 had a negative impact on the trust's fixed interest debt exposure, detracting 34 bps.
According to data from the Association of Investment Companies, City of London is currently trading at a 1.2% discount, with a NAV of 395.9p per share.
The trust also revealed it will be de-listing from the New Zealand Stock
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