City of London Investment Trust (CTY)

City of London Investment Trust (CTY) is the first investment trust to raise its Dividend for 60 consecutive years. The record stretches back to 1966, surviving multiple recessions, the spiralling inflation of the 1970s, the 1987 crash, the global financial crisis and the pandemic. Quite a remarkable feat. Further, that dividend growth has outpaced inflation over the period, as did the latest annual increase of 4.0% to 22.15p, fully covered by earnings. Job Curtis, manager since 1991, and deputy David Smith fund it from natural income alone, a discipline that stands out as enhanced dividends become more common across the sector.

CTY has outpaced the FTSE All-Share Index over one, five and ten years, though not without periods of struggle, its conservative approach offering resilience when markets fall but struggling to keep pace with growth-led rallies. The past year has played to its strengths, though, with NAV and share price total returns of 17.8% and 18.1% to 28/10/2026, against 13.7% for the index, helped by a standout year for IG and a wave of bids for existing holdings like Schroders (see Performance).

The managers have also found value in the volatility this year, buying Rightmove and Experian and adding to RELX after AI fears hit their shares, believing proprietary data strengthens their competitive positions. Elsewhere, the managers have added to REITs on attractive valuations and backed turnaround stories such as Diageo and Unilever (see Portfolio).

Demand remains robust, with CTY trading on a 2.1% premium, issuing 21.6m shares last financial year, raising £114.8m (see Discount). Meanwhile, £115m of fixed-rate debt at a blended cost of around 3.4%, most of it locked in until the late 2040s, looks ever more valuable with 10-year gilts yielding 5.4% (see Gearing).