19 March 2024

CQS New City High Yield Fund Limited
("NCYF" or the "Company")

Monthly Fact Sheet as at 29 February 2024

The Company's Fact Sheet as at 29 February 2024 has been submitted and will shortly be available for inspection on the National Storage Mechanism and on the Company's website see links below:

https://data.fca.org.uk/#/nsm/nationalstoragemechanism,

https://ncim.co.uk/cqs-new-city-high-yield-fund-ltd/.

The investment manager updates on the wider macro-economic environment and on key changes to the portfolio positions as at 29 February 2024.

Ian "Franco" Francis, investment manager at New City Yield Fund Ltd comments[1]: "The UK economy appears to be emerging from its brief recession, with the Private Mortgage Index (PMI) reporting the best figures of the last nine months, showing four months of consecutive growth. There is further optimism for the year ahead through an increase in employment from January to February, however continued supply chain delays in the Shipping sector, caused by ongoing Red Sea disruptions, has inflated the cost of goods as ships reroute away from the Suez Canal. Within the UK, wage inflation in the service sector remains stubbornly high, which implies that the Bank of England, in our view, is unlikely to risk an interest rate cut in the short-term.

European Manufacturing is still creating a drag on the economy, with Germany being the weakest. French manufacturing is in recovery, but this appears to be insufficient to counter the drag from their neighbour. European Services continue to perform well due to an increase in Tourism, though increased wage bills in this labour-intensive industry have pushed the output prices higher for a fourth consecutive month. Although this will likely dissuade the European Central Bank (ECB) from cutting rates in the short term, we believe that the earliest this would happen is June or July.

We believe that the US economy is still in better shape than its fellow Western economies, with inflation down at 3.1%. US Manufacturing is growing, and US Services are now at a seventeen-month high, having continued to rise for over a year. With inflation subdued it opens the possibility for the Federal Reserve Bank to cut rates sooner than its European and UK counterparts.

It is important to note that markets in the West appear not to be taking account of the coming elections in the UK and Europe, nor the US presidential elections in November. These will all affect market sentiment.

Within the Company, we paid the second interim dividend of 1p/share at the end of the month. In the portfolio, we continued to downsize the Boparan holding and sold some of the equity in Frontline given the outperformance, since it was purchased in October. The Co-Op 6.25% 2026 holding was sold as it has already accomplished good capital gain and no longer provides enough income to justify keeping it in the portfolio. The only purchase during the month was Virgin Money 11%, adding to the holding that we opened in January. We feel that there will still be some good opportunities to invest in the high-yield sector before the central banks start to cut rates."

-ENDS-

About CQS New City High Yield Fund Limited

CQS New City High Yield Fund Limited aims to provide investors with a high dividend yield and the potential for capital growth by investing in high-yielding, fixed interest securities. These include, but are not limited to, preference shares, loan stocks, corporate bonds (convertible and/or redeemable) and government stocks. The Company also invests in equities and other income-yielding securities.

Since the Fund's launch in 2007, the Board has increased the level of dividends paid every year. As at 31 December 2023, the Fund's dividend yield is 9.13%. In addition to quarterly dividend payments, the Fund seeks to deliver investors access to a high-income asset class across a well-diversified portfolio with low duration to help mitigate interest rate risk.

Further information can be found on the Company's website at https://ncim.co.uk/cqs-new-city-high-yield-fund-ltd/