City Merchants High Yield Trust Limited

City Merchants High Yield Trust Limited

Uncovering income opportunities in the high yield bond market

Please read the Investment Risks and Footnotes at the bottom of the page.

Notice of Annual General Meeting and Shareholder webcall

The Company’s Annual General Meeting will be held on 23 September 2020 at 10am at Radisson Blu Waterfront Hotel, Rue de l'Etau Saint Helier, JE2 3WF, United Kingdom. It will be held as a closed meeting and shareholders will not be admitted to the meeting. The Notice of Meeting can be found below under the ‘Useful Documents’ section.

Shareholders are however, invited to watch the replay of a webcall with Chairman Tim Scholefield and Portfolio Manager Rhys Davies, where they presented details of how the trust has been managed over the past year and answered shareholders’ questions.

 

Useful documents

Monthly factsheet (PDF download)

Annual financial report 2019 (PDF download)

Notice of Annual General Meeting (PDF download)

 

Why consider City Merchants High Yield Trust Limited?

  1. Aims to provide a high level of income and capital growth to investors
  2. Access to the high yield bond market, diversified across countries and industries, provides the potential to create a diverse portfolio
  3. Expert credit analysis and careful selection provide opportunities for the fund managers to add value over the long term

How we invest

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.  

Insights

Key facts

Launch date:   May 1991*
Fund managers:   Rhys Davies
Edward Craven
ISIN:   JE00B6RMDP68
AIC sector:   Debt – Loans & Bonds

* 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.

Performance

Standardised rolling 12-month performance (% growth)

  30.06.15 
30.06.16
30.06.16 
30.06.17
30.06.17
30.06.18
30.06.18 
30.06.19
30.06.19 
30.06.20
Ordinary Share Price 0.5 17.9 1.0 6.7 -3.5
Net Asset Value 2.1 16.1 1.1 6.3 1.9

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 30 June 2020 except where otherwise stated. Standardised past performance figures are updated on a quarterly basis. Source: Morningstar.

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Literature



Investment objective

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.

Company directors



All directors are non-executive and, in the opinion of the Board, are independent of the Manager.

Contact the Board of Directors

Should you wish to contact a member of the Board of Directors, please email the Company Secretary.

When you interact with us, we may collect information about you which constitutes personal data under applicable laws and regulations. The Trust privacy notice explains how we use and protect your personal data.

Footnotes

  • Total Assets: The value of all assets held, less current liabilities, including income for the current year.
  • Dividend Yield: The total declared and prospective dividends for the current financial year, expressed as a percentage of the trust’s value calculated at the last close price. The yield is indicative only and is not guaranteed.
  • Estimated NAV: The net asset value is the value of the company’s assets, less any liabilities.
  • Discount: The amount, expressed as a percentage by which the share price is less than the net asset value per share. Premium: The amount, expressed as a percentage, by which the share price is more than the net asset value per share.
  • Figures are subject to rounding.

Investment Risks

  • The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.

    When making an investment in an investment company you are buying shares in a company that is listed on a stock exchange. The price of the shares will be determined by supply and demand. Consequently, the share price of an investment company may be higher or lower than the underlying net asset value of the investments in its portfolio and there can be no certainty that there will be liquidity in the shares.

    The portfolio has a significant proportion of high-yielding bonds, which are of lower credit quality and may result in large fluctuations in the NAV of the product.

    The product uses derivatives for efficient portfolio management which may result in increased volatility in the NAV.

    The use of borrowings may increase the volatility of the NAV and may reduce returns when asset values fall.

    The product may invest in contingent convertible bonds which may result in significant risk of capital loss based on certain trigger events.

    As a result of COVID-19, markets have seen a noticeable increase in volatility as well as, in some cases, lower liquidity levels; this may continue and may increase these risks in the future.

Important information

  • City Merchants High Yield Trust Limited is regulated by the Jersey Financial Services Commission.
  • Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. This marketing material is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell securities.
  • For more information on our products, please refer to the relevant Key Information Document (KID), Alternative Investment Fund Managers Directive document (AIFMD), and the latest Annual or Half-Yearly Financial Reports. This information is available in the literature section.