‘I’m bor­row­ing £15m now – be­fore Labour gets in’

The Daily Telegraph - Your Money - - FRONT PAGE -

Vet­eran fund man­ager Job Cur­tis tells Sam Brod­beck how he got it wrong on Prov­i­dent Fi­nan­cial

The £1.5bn City of London was the first in­vest­ment trust to raise its div­i­dend for 50 con­sec­u­tive years. Job Cur­tis, a self-con­fessed “con­ser­va­tive” fund man­ager, has been at the helm for 26 of those. He told Tele­graph Money why he’s putting money into com­mer­cial prop­erty and how he wishes he could in­vest in Google. About 70pc of the fund is in­vested in FTSE 100 com­pa­nies. I look for a com­bi­na­tion of above-av­er­age div­i­dend yield and div­i­dend growth.

Funds tend to re­flect their man­agers and I’m a fairly con­ser­va­tive per­son. We achieved this track record only by in­vest­ing in con­sis­tent com­pa­nies, and I wouldn’t change that. Us­ing the in­vest­ment trust struc­ture we can re­tain up to 15pc of earn­ings in any one year to build up a re­serve. We’ve had to use that re­serve seven times in the 26 years I’ve been man­ager.

One com­pany I have looked at in re­cent years is Al­pha­bet, the owner of Google. It doesn’t pay a div­i­dend and I might have bought it if I weren’t con­strained by yield. It’s an amaz­ingly strong fran­chise. in­ter­est rate of 2.9pc. We’re tak­ing the view that we’ll beat that in­ter­est rate for the next 15 years. That’s a re­flec­tion of how low in­ter­est rates are. There’s less than a 50pc chance of get­ting a Labour gov­ern­ment but if we did, given their plans, gov­ern­ment bond yields would shoot up.

Prob­a­bly real es­tate in­vest­ment trusts. Land Se­cu­ri­ties, my big­gest hold­ing in that sec­tor, is tak­ing a very cau­tious view, and is on a 33pc dis­count to the value of the un­der­ly­ing as­sets. I do won­der if the pes­simism is over­done.

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