Job Curtis: five stocks I’ve bought for City of London Investment Trust

TL;DR

City of London Investment Trust focuses on investing in consistent and dependable companies with strong brands and market-leading positions.

Transcript

foreign hello and welcome to our latest Insider interview today I'm joined by job catas for manager of the city of London Investment Trust job great to see you again it's a pleasure so job could you first explain how city of London Investment Trust invests You mainly six the 4100 index and you focus on Dependable dividend payers so what sort of qua... Read More

Key Insights

• 🥺 City of London Investment Trust focuses on valuation-led investing and seeks reasonable valuation reflecting future prospects.
• 🥺 Consistency, strong brands, and market-leading positions are desirable qualities in companies.
• 💪 Strong balance sheets and investments in future growth are crucial for resilience and future dividends.
• 🥺 Dividend cuts may lead to reduced holdings or switches to companies with better prospects.
• 🎏 The trust has invested in NatWest, finding its dividend stream attractive.
• 👨‍💼 Switches have been made from companies like BHP to Glencore due to uncertain outlook and attractive commodity trading business.
• 😮 Inflation and interest rate rises may lead to challenges for heavily indebted companies.

Questions & Answers

Q: What qualities does City of London Investment Trust look for in companies?

The trust seeks consistent companies with strong brands, market-leading positions, and a focus on investing in their own future growth. It also prefers companies with strong balance sheets.

Q: How does City of London Investment Trust handle dividend cuts?

In the case of dividend cuts, the trust may reduce its holdings, particularly if there has been a significant share price underperformance. However, if the company still has good recovery prospects and a strong brand, the trust may retain a smaller holding.

Q: Can you provide an example of a successful switch made by City of London Investment Trust after a dividend cut?

During the pandemic, the trust reduced its holding in Shell after a massive dividend cut. However, it switched to Total Energies, which had better crisis management and did not cut its dividend. This switch proved beneficial as the oil price recovered.

Q: Has City of London Investment Trust been investing in smaller companies?

The trust has explored the small and mid-cap segment but hasn't found many opportunities that meet its criteria. It has made selective investments in medium-sized British companies and alternative funds like Round Hill Music.

Summary & Key Takeaways

• City of London Investment Trust follows a valuation-led investment approach and looks for companies with consistent performance and strong brands.

• The trust prefers companies with strong balance sheets and focuses on those that invest in their future growth.

• When facing dividend cuts, the trust may reduce its holdings or switch to other dividend-paying companies with better prospects.