23 December 2025

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

Monthly Factsheet as at 30 November 2025

The Company's Fact Sheet as at 30 November 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:

"November focused on anticipation for the UK budget. Various reports circulated in the press to gauge reactions to potential tax measures among backbenchers and Labour voters. The final outcome was a tax-later, spend-now budget, which initially appeared balanced. However, a closer review raises potential concerns.

The increase in minimum wages above the rate of inflation may place additional pressure on small businesses and the hospitality sector, potentially leading to job reductions. The freeze on tax thresholds is expected to have a gradual impact across income levels ahead of the next scheduled election. This effect is compounded by continued elevated inflation, which may take longer to decline than current OBR forecasts suggest.

The Mansion tax introduces additional considerations, as a new structure for property taxation is being implemented. While it appears equitable at first glance, future adjustments-such as lowering the starting threshold or adding new bands-could increase costs for homeowners in the southeast. Combined with rising council tax bills, this could represent a significant financial burden.

The reduction in the cash ISA allowance aims to encourage younger investors toward stocks and shares rather than cash holdings. Individuals over 65 retain a £20k allowance, reflecting their preference for lower-risk investments at pensionable age. However, this change may influence bank lending, which partly depends on deposit levels.

Regarding pensions, private-sector saving remains challenging, while the state pension triple lock continues. Adjusting this to inflation-only increases could align with fiscal sustainability. Public-sector defined benefit schemes may require gradual reform to ensure affordability over the next decade. An alternative model, such as Australia's three-pillar system, offers a potential framework. This system includes:

1.   A means-tested age pension for those over 60;

2.   A defined contribution scheme funded by a 12.5% employer contribution; and

3.  Voluntary individual contributions, taxed at concessional and non-concessional rates. Introduced in 1992, this approach has built a fund valued at AUD 4.2 trillion (GBP 2.1 trillion), equivalent to 150% of Australia's GDP, reducing reliance on state funding and contributing to economic growth.

The first November data reflecting economic sentiment came from the construction sector. The DS&P Global Construction PMI registered 39.4, down from 44.1 in October, driven by declines in infrastructure and residential building activity-the lowest levels since May 2020. Future indicators suggest limited optimism, as confidence fell to its lowest point since December 2022.

Europe shows marginal improvement, with manufacturing stable but employment in the sector declining for two and a half years, indicating businesses expect to manage short-term demand without expanding staff. The service sector remains the primary growth driver, though not at levels prompting ECB rate increases. Political challenges persist, including welfare reform debates in Germany, ongoing instability in France, and stalled Ukraine peace talks, alongside statements from President Putin interpreted as potential warnings to Western Europe."

-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/