View the article online at http://citywire.co.uk/money/article/a634226
Dividend Aristocrat bets on ‘perennial disappointment’ M&S
Job Curtis's City of London Investment Trust has managed 46 years of consecutive annual dividend increases.
Two British household names are attempting sweeping reforms to keep up with 21st century retailing – but while investor Job Curtis has just bought shares in Marks & Spencer, Tesco’s overseas expansion remains a concern for the City of London investment trust manager.
Curtis, a value investor who counts Warren Buffett as his ‘investment hero’, has managed the investment trust since 1991, helping continue a run of 46 years of annual dividend increases. ‘I don’t know any other UK investment trusts that have done it,’ he says, though ‘dividend aristrocrats’ in the US may have matched the trust’s achievement.
Though Marks & Spencer (MKS.L) doesn’t make it into the £740 million trust’s top-10 holdings – topped by blue chips with heavy exposure to emerging markets including British American Tobacco (BATS.L), Shell (RDSb.L) and Diageo (DGE.L) – Curtis says he bought into the clothes and food retailer’s shares in the past week or so.
The company, which has just reported a fall in first-half profits for the second year in a row, has reshuffled its management team, while chief executive Marc Bolland has asked investors for patience as he seeks to turn around the group’s struggling womenswear business.
Curtis admitted that in the past M&S had been a ‘perennial disappointment’, but stipulated that ‘I haven’t bet the farm on it’.
The fund manager seems less impressed by Tesco, which continues to push through a major turnaround plan after making a surprise profit warning in January.
Curtis cut back his holding in Tesco by a third earlier this year, worrying that the supermarket’s management had ‘overreached themselves’. Although Tesco is ‘Beginning to turn around UK… I’m more worried by overseas’.
But Curtis, who is attracted by long-standing brand names, said he is sticking with a core position in what is ‘still a very powerful company’.
Though Curtis says he fiddles with his portfolio less than rival investment trust managers, he has tweaked his top holdings, investing some money from holdings in British American Tobacco and Diageo into BP (BP.L) and HSBC (HSBA.L).
News sponsored by:
Making the most out of Europe's potential means seeing things differently. Learn more about how BlackRock's focused approach to investing in Europe helps investors unlock the continent's vast potential.
In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.
More about this:
Look up the shares
- Tesco PLC (TSCO.L)
- Marks and Spencer Group PLC (MKS.L)
- British American Tobacco PLC (BATS.L)
- Diageo PLC (DGE.L)
- Royal Dutch Shell PLC (RDSb.L)
- BP PLC (BP.L)
- HSBC Holdings PLC (HSBA.L)
Look up the investment trusts
More from us
Tools from Citywire Money
From the Forums
Weekly email from The Lolly
Get simple, easy ways to make more from your money. Just enter your email address below
An error occured while subscribing your email. Please try again later.
Thank you for registering for your weekly newsletter from The Lolly.
Keep an eye out for us in your inbox, and please add firstname.lastname@example.org to your safe senders list so we don't get junked.