City Merchants High Yield Trust Limited update
In light of recent unprecedented global market events, the Board and the Manager wish to provide an update to shareholders on activity within the portfolio.
Uncovering income opportunities in the high yield bond market
The Company has maintained a consistent level of dividend for several years. A simple maxim underpins this success: we will only invest when we think we are being adequately rewarded for doing so.
Today, the portfolio is invested across three broad areas of the high yield bond market. Income generators form the core of the fund, made up of bonds issued by non-financial companies that pay a high level of income to compensate for their leveraged balance sheets. Next, banks and subordinated financials - bonds in this area of the market continue to pay a premium over other areas of the market. Finally, credit intensive bonds, which are bonds that have come under price pressure, but that we believe have the right plans in place to turn around their business.
Lower expectations from high yield
Rhys Davies explains why he believes investors should expect lower returns in 2020.
Will 2020 be a good year for high yield?
2019 was a strong year for the high yield bond market; can it continue in 2020?
* The business of the Company was originally launched in 1991. It has been maintained through two corporate reconstructions, the most recent of which was in 2012 when the business was transferred to the current corporate entity in Jersey. The performance data shown in the factsheet incorporates the performance of the predecessor entity for the period to 31 March 2012 as well as the current Company from 2 April 2012.
|Ordinary Share Price||-3.1||15.8||-2.4||5.4||-7.3|
|Net Asset Value||-2.0||15.9||4.1||2.5||-7.7|
Past performance is not a guide to future returns. Ordinary share price performance figures have been calculated using daily closing prices with dividends reinvested. NAV performance figures have been calculated using daily NAV with dividends reinvested. The NAV used includes current period revenue and values debt at fair. All performance figures are in sterling as at 31 March 2020 except where otherwise stated. Standardised past performance figures are updated on a quarterly basis. Source: Morningstar.
|Terms of reference|
|Management Engagement Committee||Nomination Remuneration Committee|
|Circular to Shareholders|
|City Merchants High Yield Trust Limited - circular to shareholders (Feb 2012)||City Merchants High Yield Trust Limited - prospectus|
|Director's letter of appointment|
|Mr T Scholefield (Chairman)||Mr P Austin|
|Mr J Boothman||Mrs H MacCallum|
|Mr S McMaster|
The Company’s investment objective is to seek to obtain both high income and capital growth from investment, predominantly in high-yielding fixed-interest securities.
Further details of the Company’s Investment Policy and Risk and Investment Limits can be found in the Directors' Report contained within the Company’s Annual Financial Report.
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