News Archive

City Financial Equity Income Fund
City Financial has proposed to rename the UK Select Alpha fund to the City Financial Equity Income fund. In addition, the fund has increased in size from ~£4.5 million to ~£10.0 million through the injection of ~£5.5 million of additional investor capital. It is proposed that the fund will also move from the IMA UK All Companies sector to the IMA UK Equity Income sector. City Financial has appointed Loudwater Investment Partners to manage the fund. These changes will be designed to make the fund more efficient from a cost standpoint, to the benefit of investors.

It is often said that the financial markets are driven by logic over the long-term but by human emotion in the short-term. Indeed to quote Benjamin Graham, considered to be the grandfather of value investing, “the owner of equity stocks should regard them first and foremost as conferring part ownership of a business... the stock owner should not be too concerned with erratic fluctuations in stock prices, since in the short-term the stock market behaves like a voting machine, but in the long-term it acts like a weighing machine.”

City Financial has proposed to investors via a scheme of arrangement for the City Financial Diversified Absolute Return Fund to be merged into the City Financial MultiManager Income Fund. In a recent review, City Financial concluded that investors' long-term interests were best served if the fund was amalgamated into a larger fund so that efficiencies of scale, and corresponding lower charges, were gained to the benefit of all investors.

• Read the frequently asked questions bulletin
• Read the Proposal, Form of Proxy and Letter of Direction

The following is one in a series of timely market comments by City Financial fund managers. In light of today’s Bank of England announcement I hope you find this commentary of use with your clients. – Andrew Williams, Chief Executive, City Financial

BoE Extends Gilt Purchases – 6 August 2009

Today the Bank of England extended its bond purchase program by 50 billion pounds increasing the total purchases to 175 billion pounds. This suggests that they believe the U.K.’s recession is deeper than originally expected and has come as a surprise according to consensus. The BoE has given a clear signal that their stimulus plan and record low interest rates, which have been kept at 0.5%, was not sufficient - with the economy needing more support.

The City Financial Strategic Gilt Fund was named the Number 2 fund in the 23 July 2009 edition of Professional Adviser’s Hot 100. This accolade recognises the fund manager Ian Williams’ consistent positive performance over a rolling one-year period. What follows are some of Ian’s recent thoughts which I hope might be of use with your clients.” – Andrew Williams, Chief Executive, City Financial

For the balance of the summer and into Q4 we believe the primary driver behind gilt market behaviour will be equity markets. We believe the FTSE 100 Index is now topping out on a medium-term view and that cash will be taken out of equities and will flow into gilts. In our view it is unlikely that the unfolding economic data will be able to support equities valuations at current levels. We do not anticipate a collapse to March’s lows of 3,500; however, a downward revision to 4,000 – 4,100 is at least a strong possibility.

With the Government, the Opposition, the Bank of England, and the market all at odds over the inflationary picture down the road I hope that the following comments from City Financial Strategic Gilt fund manager, Ian Williams, are helpful for advisers and their clients. – Andrew Williams, Chief Executive, City Financial

Inflation or deflation – advisers are asking, how do I stay on the right side of this?

Over the last year investors and their advisers may feel a bit like they’ve been thrown into the proverbial deep end of the pool. A litany of negative headlines, heralding an economic landscape scarred by bank failures and surviving on unprecedented government support, has spurred high and often irrational market volatility.

Responding on to the first failed gilt auction in nearly seven years, Strategic Gilt Fund manager Ian Williams explains that this particular failed auction ought to be viewed more as a reflection of the market’s sentiment regarding longer-dated gilts, rather than to all gilts.

The manager of the City Financial Strategic Gilt Fund explains that the recently announced policy of quantitative easing amounts to little more than the modern day equivalent of printing money.

I hope that the following commentary by Strategic Gilt Fund manager Ian Williams is helpful for any investor facing decisions during the ISA season.

“No time for a novice”

The Bank of England has embarked on a new course into uncharted waters. With the adoption of a quantitative easing strategy, the Bank hopes to relieve the strained economy and to encourage lending institutions to get back to business. However, when all the jargon is stripped away it becomes clear that this strategy amounts to little more than the modern-day equivalent of printing money. This approach has serious longer-term inflationary implications.

Speaking to Bloomberg TV, City Financial Strategic Gilt Fund manager Ian Williams warns that the policies announced by the Bank of England on March 5th risk inflation in the medium to long-term.

• View the Bloomberg TV video

“What many have known to be true for some time is now official, the UK is in recession. We hope that these comments by John Husselbee, fund manager of the City Financial MultiManager range, are helpful in stepping back and taking stock.”

– Andrew Williams, Chief Executive, City Financial

Last week government figures confirmed that the UK is indeed officially now in a recession for the first time since 1991. The economy shrank by 1.5% in the last quarter, the second consecutive quarter of decline which is generally accepted by all to signify a recession. This confirmation seems to rather contradict the spot of political gardening Baroness Vadera was doing the previous week. The green fingered Baroness, in a television interview on ITV, spoke about seeing the ‘green shoots’ in the economy. Her cautious optimism was clearly rather embarrassing for the Government as the economic data continues to deteriorate. It seems gardening has long been a popular pastime for Ministers, I remember Norman Lamont making similar comments as Chancellor during the last recession.

The Times highlights the City Financial Strategic Gilt Fund in their article "Top tips for saving in a slump."

"Among funds, Darius McDermott at broker Chelsea Financial Services likes the City Financial Strategic Gilt fund. Its largest holdings include index-linked 2013 and 2016 stock. The fund is up 9.7% in the past year, and is yielding 3.41%, according to Trustnet, the financial-data firm" says the article.

I hope that the following commentary by Strategic Gilt Fund manager Ian Williams is helpful for any investor facing the decision between government and corporate debt.
—Andrew Williams, Chief Executive

Last year in an article that was published in the Financial Times I remarked that the smart money in corporate bond funds would be the ones who got out first.(1) As it turns out, in 2008, the IMA UK Corporate Bond sector fell by 10.29% while the IMA UK Gilt sector delivered a positive return of 11.76%.(2) The fact is that 2008 was truly an historic year and very few people, myself included, predicted that in its bid to stabilise the banking sector the UK government would end the year as the sector’s largest shareholder. And though a consensus view has begun to emerge that corporate bonds are too cheap to ignore, I believe what I said in January 2008 still holds true today, although for a different set of reasons. Previously very tight spreads and a looming recession were sound justification for our bearish position. Today we are still bearish on corporate bonds, but why?

City Financial, the London-based asset management group, has signed an agreement with Novia Financial plc for their funds to be amongst the first listed on the new Novia WRAP platform..

In today’s challenging economic environment investors looking to minimise credit risk may wish to consider the City Financial Gilt Fund or the City Financial Strategic Global Bond Fund. – Andrew Williams, Chief Executive, City Financial

Lately, it seems that the financial press has been taking a closer look at corporate bonds, and more often than not coming to the conclusion that they have become so inexpensive as to represent a smart asset class for allocation. We disagree.

With the Bank of England’s rate cut ringing in our ears, I wanted to provide you with the market comment by one of our fund managers John Husselbee. We hope you find these thoughts helpful. – Andrew Williams, Chief Executive, City Financial



“‘Would you tell me, please, which way I ought to go from here?' Alice speaks to Cheshire Cat”

Alice in Wonderland continues…..
‘That depends a good deal on where you want to get to,' said the Cat. 
‘I don't much care where--' said Alice. 
‘Then it doesn't matter which way you go,' said the Cat. 
‘--so long as I get somewhere,' Alice added as an explanation. 
‘Oh, you're sure to do that,' said the Cat, `if you only walk long enough.' -- 

An Extract from ‘Alice in Wonderland’ by Lewis Carroll

You may recognise this passage from Alice in Wonderland; it was once quoted to me during a training day entitled “Strategy and Planning.” What followed was an in depth examination of the Chaos Theory, I will spare you the details!

The following is a part of the series of timely market comments by City Financial fund managers. We hope you find these thoughts helpful. – Andrew Williams, Chief Executive, City Financial

“Interest rates cut to 3%! …None of the 60 economists surveyed by Bloomberg News predicted the move” – Bloomberg

Last month we issued our market comment entitled “The King is dead. Long live the King” arguing that sharp cuts in UK base rates were inevitable and that investors needed to give serious consideration to the implications of rapidly falling returns on cash deposits. It has been demonstrated this week that the fear of recession is paramount to the Bank of England.

What does this mean?

In her discussion concerning the current economic woes investors are facing, Guardian columnist Heather Connon characterizes gilts as the "ultimate safe haven," asset class and specifically notes the "respectable" returns of the City Financial Strategic Gilt Fund.

The following is one in a series of timely market comments by City Financial fund managers. We hope you find these thoughts informative. – Andrew Williams, Chief Executive, City Financial

“If you can keep your head whilst all around are losing theirs…”

As far as I have been able to make out, one of the few benefits of getting older is experience. Having been around the track a few times does provide a different perspective on world events.

City Financial, the London-based asset management group, has signed an agreement with Standard Life Savings Ltd.

Money Management Magazine highlights City Financial in its survey of the Cautious Managed sector. In her article journalist Jo Dymock recognises the City Financial MultiManager Income Fund as the top performer over five years with returns of 19.4% AGR.

According to Ian Williams, manager of the City Financial Strategic Gilt Fund, the time for speculative consideration over a possible recession is past, and IFAs need to start focusing on solutions that will protect their investment portfolios as the UK heads into full-blown recession.

Speaking to Investment Week, John Husselbee explains the high-conviction approach that has lead the City Financial MultiManager Income Fund to be a cautious managed sector leader.

A new article in MoneyMarketing details the new City Financial website.

New platform designed in response to growing IFA demand

City Financial, the London-based asset management group, is pleased to announce the launch of its new website. The website has been redesigned in response to increased IFA interest to provide easier access to information about the company and its products, and can be found at cityfinancial.co.uk.

City Financial, the London-based asset management group, is pleased to announce that it has signed an agreement with Investment Funds Direct Limited to place its fund range on the Ascentric Wrap platform, the independent wrap service exclusively for IFAs and the Fundsdirect fund supermarket for consumers.

The current Citywire “Best Fund Managers”(1) league table shows that John Husselbee, manager of the City Financial MultiManager Income Fund, has exhibited exceptional consistency in the IMA Cautious Managed sector being ranked:

2nd over 5 years [out of 32 fund managers]
1st over 4 years [out of 43 fund managers]
3rd over 3 years [out of 54 fund managers] (2)

Appointment underlines City Financial’s commitment to independent advisers

City Financial Investment Company Limited (City Financial), is pleased to announce the appointment of Graham Hooper to the City Financial management team.

Graham will have joint responsibility with Patrick Cooper for continuing the rapid growth of City Financial’s funds distribution, through the independent financial advisory (IFA), multi manager and private wealth management communities.

City Financial is pleased to announce that its MultiManager Income Fund has been ranked the top performing fund in the Cautious Managed Sector over the last three years.*

City Financial is pleased to announce that its Strategic Gilt Fund has been ranked the best performing Gilt Fund in its sector for 2007*.

The City Financial Strategic Gilt Fund, managed by Ian Williams, was launched on 8 December 2006, with an innovative but tried and tested investment strategy. In order to enhance performance, the Fund uses options in addition to more traditional, some might say old-fashioned, investment techniques.

City Financial Investment Company Limited (City Financial) is pleased to announce that it has successfully completed the acquisition of two top performing multimanager funds from Neptune Investment Management Limited (Neptune), at the same time securing the services of the existing fund management team at North Investment Partners Limited (North).