29 April 2024

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

Monthly Fact Sheet as at 31 March 2024

The Company's Fact Sheet as at 31 March 2024 has been submitted and is available for inspection on the Company's website: 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 31 March 2024. "

Ian "Franco" Francis, investment manager at New City Yield Fund Ltd comments[1]: "The recession in the UK, albeit one of the briefest, appears to be over for now. Manufacturing output is now back in positive territory, and the overall S&P Global Flash UK Manufacturing PMI is at a 20-month high at 49.9 - not quite in growth yet but getting there. Meanwhile we believe Services showed good growth despite the minor slowdown in momentum. Overall business confidence appears to be remaining at a good level for the year ahead, the only cloud on the horizon is inflation. Although it fell to 3.4% in February, it is still higher than the US and Europe. Furthermore, the rise in the minimum wage in April is likely to push wage demands higher as the workforce tries to maintain pay differentials for more skilled workers. Although we have had more dovish noises from the Governor of the Bank of England, Andrew Bailey, we believe the Bank is unlikely to cut rates before June/July, once it can be more confident of the inflation rate approaching the 2% target.

"Europe appears to be being held back by its two major economies, France and Germany. In France, both Services and Manufacturing are contracting, whilst in Germany Manufacturing still appears to be in the doldrums, and Services are just treading water. This will likely have a positive knock-on effect of cooling inflation further as wage demands in both sectors are decreasing. This news will be welcomed by the European Central Bank (ECB) and keep them on track for the well telegraphed interest rate cut in June.

"The US is still in growth mode with Manufacturing hitting a 21-month high whilst Services are still growing, but at a slower pace. Inflation increased marginally to 3.2% in February, up from 3.1% in January. It is likely to have increased in March as well on the back of fuel prices and wage demands. It is interesting to note that the comments from the Governor of the Federal Reserve Bank are more dovish, as the Bank appears to be more sanguine about inflation and more focused on keeping the recovery going.

"For the Company's portfolio we added further to Royal London 10 1/8% perpetual. We also opened a new holding in Morrisons Fuel Group Term Loan with a coupon of SONIA plus 575bps at issue. We are anticipating a busier month in European and the UK High Yield market in April, although we will have to wait to see whether the quality or the yields on offer are suitable for the Fund."

-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/