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(Alliance News) - CQS New City High Yield Fund Ltd on Tuesday hiked its dividend after recovering from a subdued first-half performance to end its financial year with a rise in net assets.
Net assets at June 30 stood at GBP233.1 million, up 0.9% year-on-year from GBP231.1 million.
Net asset value per share fell by 4.2% to 55.19 pence from 57.63p, however, since CQS New City had 422.4 million shares in issue at the end of financial 2019, compared with 401.0 million at the end of last year.
Shares in the company were 0.2% higher at 59.54 pence each in London on Tuesday morning, meaning it is trading at 7.9% premium to its June 30 net asset value.
The company boosted its full-year payout by 0.7% to 4.45p per share from 4.42p.
CQS New City said: "The period of subdued performance at the interim stage of our financial year subsequently reversed and the year ending June 30 saw a net asset value total return of 3.79%. The company's shares have continued to trade at a premium to their net asset value. The average premium over the year was 6.49%."
The company invests in fixed income securities like preference shares, loan stocks and corporate bonds, it explained. CQS New City's investment policy does not have any geographical or sector limits, hence why it does not have a stock market index benchmark.
Looking ahead, CQS New City said that Brexit unpredictability and trade tensions between the US and China are "far from reassuring" but uncertainty could also allow for investment opportunities.
Investment Manager Ian Francis said: "As always we continue to maintain a diversified portfolio across a range of sectors and have a good proportion of the portfolio in non-sterling currencies which can act as a hedge against a possible Brexit Sterling collapse.
"We also favour shorter duration bonds; that is bonds that will repay within a two to three year timetable as we try to hedge against possible interest rate rises. Although the outlook for economic growth looks difficult we have navigated through these waters before and remain confident we can find suitable investments that meet our income objectives without increasing the risk we always take in when investing in the high yield universe."
By Eric Cunha; ericcunha@alliancenews.com
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