LONDON (Alliance News) - City of London Investment Trust PLC on Friday said it remains attracted to the dividend yield from UK equities.
The trust, which aims to generate long-term growth in income and capital by investing in London-listed equities, has a "well diversified" investment portfolio, according to Chairman Philip Remnant, who said there are "likely to be dividend cuts from some London-listed companies.
"Growth in developed economies should continue to be underpinned by the positive effect on consumers' expenditure of the lower oil price. In addition, central banks seem to be inclined to keep interest rates very low or only increase gradually in the case of the US. For the UK, the run-up to the referendum on membership of the European Union could lead to additional volatility," Remnant said.
"Overall, the dividend yield from UK equities remains attractive relative to the main alternatives and a portfolio of high quality income investments should deliver a competitive return," he added.
The chairman's comments came as the trust reported a net asset value total return of 1.5% in the six months to December 31, which was slightly behind the 1.7% average for the UK Equity Income Investment Trust sector, ahead of the 0.8% of the UK Equity Income OEIC sector and the negative 2.0% of the FTSE All- Share Index.
Shares in the trust were up 0.9% at 344.70 pence on Friday.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
Copyright 2016 Alliance News Limited. All Rights Reserved.