22 October 2025

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

Monthly Factsheet as at 30 September 2025

The Company's Fact Sheet as at 30 September 2025 has been submitted and is available for inspection on the Company's website, https://ncim.co.uk/cqs-new-city-high-yield-fund-ltd/.

Ian 'Franco' Francis, Investment Manager at New City High Yield Fund, comments:

"It is unusual for the Flash PMIs and full PMIs to diverge significantly, but the September S&P Global UK PMI Composite Output Index came in 0.9 points lower than the Flash estimate at 50.1, its lowest level for five months, implying unchanged business volumes across the private sector.

Notably, manufacturing was at its weakest for six months. The growth seen over the summer was short-lived, and the economy is now focusing more closely on the upcoming Autumn Budget, with both businesses and households deferring major decisions and orders until after 26th November. Further to this, more job cuts were recorded, alongside slower growth projections for companies, which may weaken cost pressures and ease inflation. This could benefit the more dovish members of the Bank of England's Monetary Policy Committee, as well as the Chancellor of the Exchequer.

In contrast, the HCOB Flash Eurozone PMI figures were broadly aligned. Although the region remains on a growth path, political turmoil in France is having a particularly negative impact on the country's manufacturing sector. Additionally, France and Germany have yet to see any immediate benefit from increased defence spending. On the employment front, growth, which was only advancing at a snail's pace, has now come to a halt as service sector hiring slows and manufacturing weakens further, particularly in Germany. Cost inflation in services has eased, which may encourage the ECB to trim rates further by year-end.

In the US, inflation remains above the Federal Reserve's 2% target. However, lower growth expectations in both services and manufacturing, combined with concerns over the broader impact of tariffs and the political environment, are resulting in increased inventories and a slowdown in future orders.

The reduced ability of businesses to pass on tariff costs may well encourage the Fed to lower interest rates again towards the end of the year. Growth remains robust but is slowing from the July peak. It is probably only a matter of time before President Trump again criticises the Fed for not cutting rates, blaming them for any perceived slowdown.

Turning to the portfolio, we sold most of our holding in Lloyds 7 7/8% Perpetual, reallocating into Sherwood Financing 9.625% 2029. With the proceeds from the redemption of REA 8 ¾% 2025 at 104, we invested in Stonegate 10.75% 2029, REA 9% Preferred, 888 Acquisitions 10 3/4% 2030, Aston Martin Capital 10.375% 2029, and opened a new holding in Foresight Environmental Infrastructure equity.

Looking ahead, we anticipate more volatility in UK markets as we approach the Budget at the end of November, which may in turn present new opportunities for the portfolio."

-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 30 June 2025, the Company's dividend yield was 8.77%. 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/