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The Metropolis of London Funding Belief (LSE:CTY) is a dividend share with a distinction. Extremely, since 1966, it’s managed to extend its payout to shareholders every year. This implies it holds the file for the longest unbroken run of dividend development of any UK inventory. And but it doesn’t do something intelligent. It merely invests in different equities listed totally on the London Inventory Alternate.
At 30 April 2025, it held 79 particular person positions with a market worth of £2.38bn. Its three greatest holdings — accounting for 13.5% of the fund — had been HSBC (£111.4m), Shell (104.3m) and RELX (103.7m).
| Nation | No. Holdings | Market worth at 30.4.25 (£m) | Value at 30.4.25 (£m) | Unrealised acquire at 30.4.25 (£m) |
|---|---|---|---|---|
| UK | 69 | 2,184 | 1,658 | 526 |
| USA | 4 | 50 | 32 | 18 |
| Switzerland | 2 | 42 | 24 | 18 |
| Germany | 2 | 59 | 21 | 38 |
| France | 1 | 26 | 20 | 6 |
| Hong Kong | 1 | 19 | 15 | 4 |
| Complete | 79 | 2,380 | 1,770 | 610 |
The case for home equities
With the UK market providing a few of the greatest yields round, it is smart for an income-focused funding belief to focus on home firms. Presently (13 June), the inventory’s yielding 4.36%.
However there’s extra to the belief than dividends. Its goal is to offer long-term development in revenue and capital.
Since April 2015, its share worth has grown 86%. This ignores the impression of reinvesting the dividends acquired, a course of generally known as compounding.
The truth is, the belief’s supervisor, Janus Henderson Traders, stays bullish. It says: “We predict the valuation of UK equities is compelling in contrast with equivalents abroad”. It additionally notes that home shares are “comparatively much less affected” by tariffs on account of their deal with companies.
As well as, it claims that the worldwide nature of the shares held by the belief — it estimates two-thirds of their income is earned abroad — helps present a extra diversified portfolio. It anticipates additional rate of interest cuts by the Financial institution of England over the subsequent 12 months, which ought to additional enhance valuations.
Potential points
However regardless of the spectacular file of the belief’s funding supervisor, it doesn’t have an unblemished file.
its 69 UK holdings, 30 are at the moment displaying a paper loss. Three of them have misplaced greater than half their worth — XP Energy (58%), Vodafone (56%) and Glencore (52%).
It additionally must be remembered that dividends are by no means assured. And simply because a inventory’s been capable of improve its payout yearly for practically six many years, it doesn’t imply it will proceed. The belief’s uncovered to the identical world uncertainty that impacts all buyers.
My verdict
However funding firms — together with actual property funding trusts — are an effective way of spreading threat via a single shareholding. In response to the Affiliation of Funding Firms, there are 96 of them on the FTSE 350.
They’ve a popularity for delivering constant returns over a protracted interval, which makes them well-liked with pension fund managers.
And as you’ll anticipate of a belief investing in different quoted firms, its shares are buying and selling very near its web asset worth. Due to this fact, taking a place isn’t about getting one thing low-cost. As a substitute, the funding case is constructed round a perception that high quality UK firms will proceed to carry out over the long run.
On this foundation, buyers who’ve confidence within the prospects for UK equities — and need publicity to a number of blue chip firms via a single shareholding – may take into account including the inventory to their portfolios.
