19 March 2024
CQS New
City High Yield Fund Limited
("NCYF" or the "Company")
Monthly Fact Sheet as at 29 February 2024
The Company's Fact Sheet as at 29
February 2024 has been submitted and will shortly be available for
inspection on the National Storage Mechanism and on the Company's
website see links below:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism,
https://ncim.co.uk/cqs-new-city-high-yield-fund-ltd/.
The investment manager updates on
the wider macro-economic environment and on key changes to the
portfolio positions as at 29 February 2024.
Ian "Franco" Francis, investment
manager at New City Yield Fund Ltd comments[1]: "The UK
economy appears to be emerging from its brief recession, with the
Private Mortgage Index (PMI) reporting the best figures of the last
nine months, showing four months of consecutive growth. There is
further optimism for the year ahead through an increase in
employment from January to February, however continued supply chain
delays in the Shipping sector, caused by ongoing Red Sea
disruptions, has inflated the cost of goods as ships reroute away
from the Suez Canal. Within the UK, wage inflation in the service
sector remains stubbornly high, which implies that the Bank of
England, in our view, is unlikely to risk an interest rate cut in
the short-term.
European Manufacturing is still
creating a drag on the economy, with Germany being the weakest.
French manufacturing is in recovery, but this appears to be
insufficient to counter the drag from their neighbour. European
Services continue to perform well due to an increase in Tourism,
though increased wage bills in this labour-intensive industry have
pushed the output prices higher for a fourth consecutive month.
Although this will likely dissuade the European Central Bank (ECB)
from cutting rates in the short term, we believe that the earliest
this would happen is June or July.
We believe that the US economy is
still in better shape than its fellow Western economies, with
inflation down at 3.1%. US Manufacturing is growing, and US
Services are now at a seventeen-month high, having continued to
rise for over a year. With inflation subdued it opens the
possibility for the Federal Reserve Bank to cut rates sooner than
its European and UK counterparts.
It is important to note that markets
in the West appear not to be taking account of the coming elections
in the UK and Europe, nor the US presidential elections in
November. These will all affect market sentiment.
Within the Company, we paid the
second interim dividend of 1p/share at the end of the month. In the
portfolio, we continued to downsize the Boparan holding and sold
some of the equity in Frontline given the outperformance, since it
was purchased in October. The Co-Op 6.25% 2026 holding was sold as
it has already accomplished good capital gain and no longer
provides enough income to justify keeping it in the portfolio. The
only purchase during the month was Virgin Money 11%, adding to the
holding that we opened in January. We feel that there will still be
some good opportunities to invest in the high-yield sector before
the central banks start to cut rates."
-ENDS-
For
Further Information
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CQS
New City High Yield Fund Limited
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T: +44 (0) 20 7201 6900
E: contactncim@cqsm.com
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Singer Capital Markets
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T: +44 (0) 20 7496 3000
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TB
Cardew
Tania Wild
Henry Crane
Liam Kline
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T: +44 (0) 20 7930 0777
M: +44 (0) 7425 536 903
M: +44 (0) 7918 207 157
M :+44 (0) 7827
130429
E: ncyf@tbcardew.com
https://www.tbcardew.com/
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Company Secretary and Administrator
BNP Paribas S.A., Jersey
Branch
Dean Plowman
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T: 01534 813 967
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About CQS New City High Yield Fund
Limited
CQS New City High Yield Fund Limited
aims to provide investors with a high dividend yield and the
potential for capital growth by investing in high-yielding, fixed
interest securities. These include, but are not limited to,
preference shares, loan stocks, corporate bonds (convertible and/or
redeemable) and government stocks. The Company also invests in
equities and other income-yielding securities.
Since the Fund's launch in 2007, the
Board has increased the level of dividends paid every year. As at
31 December 2023, the Fund's dividend yield is 9.13%. In addition
to quarterly dividend payments, the Fund seeks to deliver investors
access to a high-income asset class across a well-diversified
portfolio with low duration to help mitigate interest rate
risk.
Further information can be found on
the Company's
website at https://ncim.co.uk/cqs-new-city-high-yield-fund-ltd/