The Metropolis of London Funding Belief (LSE:CTY) is a dividend share with a distinction. Extremely, since 1966, it’s managed to extend its payout to shareholders annually. This implies it holds the report for the longest unbroken run of dividend progress of any UK inventory. And but it doesn’t do something intelligent. It merely invests in different equities listed totally on the London Inventory Change.

At 30 April 2025, it held 79 particular person positions with a market worth of £2.38bn. Its three largest holdings — accounting for 13.5% of the fund — had been HSBC (£111.4m), Shell (104.3m) and RELX (103.7m).

The case for home equities

With the UK market providing a few of the finest yields round, it is sensible for an income-focused funding belief to focus on home corporations. Presently (13 June), the inventory’s yielding 4.36%.

However there’s extra to the belief than dividends. Its goal is to supply long-term progress in earnings and capital.

Since April 2015, its share price has grown 86%. This ignores the impression of reinvesting the dividends acquired, a course of often known as compounding.

In truth, the belief’s supervisor, Janus Henderson Traders, stays bullish. It says: “We think the valuation of UK equities is compelling compared with equivalents overseas”. It additionally notes that home shares are “relatively less affected” by tariffs as a consequence of their give attention to companies.

As well as, it claims that the worldwide nature of the shares held by the belief — it estimates two-thirds of their income is earned abroad — helps present a extra diversified portfolio. It anticipates additional rate of interest cuts by the Financial institution of England over the subsequent 12 months, which ought to additional increase valuations.

Attainable points

However regardless of the spectacular report of the belief’s funding supervisor, it doesn’t have an unblemished report.

Taking a look at its 69 UK holdings, 30 are at present displaying a paper loss. Three of them have misplaced greater than half their worth — XP Energy (58%), Vodafone (56%) and Glencore (52%).

It additionally must be remembered that dividends are by no means assured. And simply because a inventory’s been in a position to improve its payout yearly for practically six many years, it doesn’t imply it will proceed. The belief’s uncovered to the identical world uncertainty that impacts all buyers.

My verdict

However funding corporations — together with actual property funding trusts — are a good way of spreading danger by way of a single shareholding. In response to the Affiliation of Funding Firms, there are 96 of them on the FTSE 350.

They’ve a repute for delivering constant returns over a protracted interval, which makes them in style with pension fund managers.

And as you’ll anticipate of a belief investing in different quoted corporations, its shares are buying and selling very near its web asset worth. Due to this fact, taking a place isn’t about getting one thing low cost. As a substitute, the funding case is constructed round a perception that high quality UK corporations will proceed to carry out over the long run.

On this foundation, buyers who’ve confidence within the prospects for UK equities — and need publicity to a number of blue chip corporations by way of a single shareholding – might think about including the inventory to their portfolios.