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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 annually. This implies it holds the document 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 Trade.
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 — have 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 |
| Whole | 79 | 2,380 | 1,770 | 610 |
The case for home equities
With the UK market providing among 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 affect of reinvesting the dividends obtained, a course of often 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 as a consequence of their concentrate on 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 increase valuations.
Potential points
However regardless of the spectacular document of the belief’s funding supervisor, it doesn’t have an unblemished document.
Taking a look at its 69 UK holdings, 30 are at present exhibiting a paper loss. Three of them have misplaced greater than half their worth — XP Energy (58%), Vodafone (56%) and Glencore (52%).
It additionally needs to be remembered that dividends are by no means assured. And simply because a inventory’s been in a position to enhance its payout yearly for almost six a long time, it doesn’t imply it will proceed. The belief’s uncovered to the identical international uncertainty that impacts all traders.
My verdict
However funding firms — together with actual property funding trusts — are an effective way of spreading danger by way of a single shareholding. In line with the Affiliation of Funding Firms, there are 96 of them on the FTSE 350.
They’ve a fame for delivering constant returns over a protracted interval, which makes them in style with pension fund managers.
And as you’d count on of a belief investing in different quoted firms, its shares are buying and selling very near its web asset worth. Subsequently, 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, traders who’ve confidence within the prospects for UK equities — and need publicity to a number of blue chip firms by way of a single shareholding – may think about including the inventory to their portfolios.
