City of London Investment Group Trading Update – 1st Quarter Funds under Management

City of London Investment Group Plc

City of London Investment Group (LON:CLIG), a leading specialist asset management group offering a range of institutional products investing in closed-end funds, announced today that as at 30th September 2018, FuM were US$5.0 billion (£3.8 billion). This compares with US$5.1 billion (£3.9 billion) at the Company’s year-end on 30th June 2018. A breakdown by strategy follows:

FuM ($mn)

Strategy Index

Sep-18

Jun-18

%

Net

%

(estimate)

inc/dec

Flows

inc/dec

EM

        4,016

   4,207

-5%

(95)

MSCI EM

-1%

DEV

           577

      481

20%

     98

MSCI ACWI

4%

Frontier

           215

      245

-12%

(21)

MSCI Frontier

-2%

Opportunistic Value

           200

      174

15%

26

ACWI/Barclays Global Agg

2%

        5,008

5,107

       8

 

Note: Opportunistic Value includes the new Municipal Bond strategy.

IM Performance

IM performance was slightly behind benchmark over the quarter. Specifically, in the Emerging Market and Frontier strategies underlying NAV performance was weak (that is, the underlying closed-end fund managers underperformed their relevant benchmark indices). In the Developed strategy relative returns were impacted by widening discounts.

Flows were neutral over the quarter. The EM, Frontier and Opportunistic value strategies saw rebalancing outflows which were offset by continued strong flows into the Developed strategy and the funding of a new Municipal bond mandate.

Operations

The Group’s income currently accrues at a weighted average rate of approximately 77 basis points of FuM, net of third party commissions. “Fixed” costs are c. £1.1 million per month, and accordingly the current run-rate for operating profit, before profit-share of 30% and an estimated EIP charge of 4%, is approximately £1.4 million per month based upon current FuM and a US$/£ exchange rate of US$1.3 to £1 as at 30th September 2018.

The Group estimates that the post-tax profit for the first three months of the year will be approximately £2.2 million (2017: £2.5 million).

City of London Investment Group Dividends

The final dividend of 18 pence per share, subject to approval at the AGM on 22nd October 2018, will be paid on 30th October 2018, bringing the total dividend for the financial year 2017-18 to 27 pence (2016-17: 25 pence).

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