Holdings in stocks that are traditional bastions of the FTSE 100 have helped City of London investment trust manager Job Curtis deliver a positive return when his peer group has been firmly in the red, he told FT Adviser.
In performance terms, the trust has returned more than 5 per cent this year to date, while the average trust in its peer group, the AIC UK Equity Income sector, has lost more than 1 per cent, as at April 7.
Curtis, who has managed the trust for more than 30 years, said the three-year performance figures for the trust have been helped by he strong performance of UK banks, which have also been a source of dividends for the trust.
He said that while valuations have moved markedly, the shares still traded at a discount, and in the absence of a prolonged recession, Curtis said he felt they remained an attractive investment.
More recently, he said it has helped having a market weighting to oil giants such as BP and Shell, as well as exposure to consumer staple stocks and to UK defence stocks, a sector to which he has been adding of late.
Curtis said: “We bought into BAE Systems during the pandemic, when it was really out of favour.
“Since then, it has really take off, and the outlook for defence spending has changed markedly.”
A stock he has long held within the portfolio is Unilever, which has fallen by 12 per cent over the past year, and which recently announced a corporate transaction that sent the share price down.
However, Curtis said he liked Unilever for its presence in emerging markets, but was cautious about the merits of the recent transaction, based on the terms secured by Unilever.
The performance of the trust has fed into the corporate activity of City of London, with the board able to issue £26mn worth of new shares at a premium so far in 2026.
The board has a policy that it will issue shares if the premium reaches 2 per cent, and buy shares back if the discount reaches 2 per cent.