City of london IT

MarcoM

This trust has nearly dropped to levels seen last year when the markets hammered Truss and her budget out of office....
I was wondering what otjer holder of thus investment thought, are you buying more?

ColdIron

I use it for income and the dividends are unaffected. I'll worry about the eventual share price when I come to sell it whenever that may be. It's not an investment I would have for growth

wmb194

It certainly beginning to look oversold on a short-term basis. It's full of large FTSE100 companies though - see the right hand side of the picture below for some of the portfolio - so perhaps it depends on your outlook for that index? I do own a few shares in it but what puts me off adding more is that it tends to trade at a premium to NAV and you can find similar portfolios elsewhere in ITs, OEICs and ETFs trading at or below their NAVs.

tacpot12

I hold CTY and would be very happy to buy more of it at the current price. I bought my holding in 2018 when the yield was 3.9%, last year the yield was 4.9%, and is heading for above 5% this year. So while it has dropped in value (by about 13%) since I bought it, I'm still happy with the purchase as it was bought for its dividend income and it still has a 2% premium on its NAV.

Another large holding I have, that might be an alternative for you, is iShares UK Dividend ETF (IUKD). The yield last year was 6.3%, and the charges are lower than for CTY. 

coastline

As posted earlier it's oversold using short term TA indicators . If you're buying longer term then at least you're not buying on the all time high. In an income portfolio there's a healthy 5.2% dividend which is a bit more than the FTSE around 4%.

City of London Investment Trust PLC, UK:CTY Advanced Chart - (LON) UK:CTY, City of London Investment Trust PLC Stock Price - BigCharts.com (marketwatch.com)

Here's the same chart over 5 years with the FTSE shown in orange ( no dividends included )

City of London Investment Trust PLC, UK:CTY Advanced Chart - (LON) UK:CTY, City of London Investment Trust PLC Stock Price - BigCharts.com (marketwatch.com)

MarcoM

tacpot12 said:

I hold CTY and would be very happy to buy more of it at the current price. I bought my holding in 2018 when the yield was 3.9%, last year the yield was 4.9%, and is heading for above 5% this year. So while it has dropped in value (by about 13%) since I bought it, I'm still happy with the purchase as it was bought for its dividend income and it still has a 2% premium on its NAV.

Another large holding I have, that might be an alternative for you, is iShares UK Dividend ETF (IUKD). The yield last year was 6.3%, and the charges are lower than for CTY. 

would you advise on another similar dividend etf but with less lexposure to uk but more exposure towards other countries?

jak22

A different income IT is also down a fair bit this month although not back to last Autumn levels. When interest rates were low then taking dividend as cash - esp. in an ISA - was very handy - but for now there's always the re-invest option.

ColdIron

It's worth remembering that yield is a function of dividend (in pounds and pence per share) divided by share price

Share price goes down, yield goes up

wmb194

jak22 said:

A different income IT is also down a fair bit this month although not back to last Autumn levels. When interest rates were low then taking dividend as cash - esp. in an ISA - was very handy - but for now there's always the re-invest option.

Which one are you referring to?

wmb194

MarcoM said:

tacpot12 said:

I hold CTY and would be very happy to buy more of it at the current price. I bought my holding in 2018 when the yield was 3.9%, last year the yield was 4.9%, and is heading for above 5% this year. So while it has dropped in value (by about 13%) since I bought it, I'm still happy with the purchase as it was bought for its dividend income and it still has a 2% premium on its NAV.

Another large holding I have, that might be an alternative for you, is iShares UK Dividend ETF (IUKD). The yield last year was 6.3%, and the charges are lower than for CTY. 

would you advise on another similar dividend etf but with less lexposure to uk but more exposure towards other countries?

Other ETF managers are available but iShares offers a number of equity income options.

https://www.ishares.com/uk/individual/en/products/etf-investments#/?productView=all&fac=43535%7C43580%7C43581%7C43584%7C43585%7C43615&pageNumber=1&sortColumn=totalFundSizeInMillions&sortDirection=desc&dataView=keyFacts&keyFacts=all&fst=50572

Prism

ColdIron said:

I use it for income and the dividends are unaffected. I'll worry about the eventual share price when I come to sell it whenever that may be. It's not an investment I would have for growth

Is that not going to cause a bit of a problem though over time? The dividends are unaffected but the increase this year has been tiny - 1% I think. At what point does an income focused trust become an issue if it doesn't come close to inflation increases.