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UK
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Investment Trust Insider
Investment Trust Insider
Uk Equity Income 18 Sep, 2024

Buybacks can restore the UK to its former glory, says City’s Job Curtis

City of London fund managers Job Curtis and David Smith say increased share buybacks in the UK will attract overseas investors as trust lifts its dividend for a record 58th year.

City of London (CTY) fund managers Job Curtis and David Smith believe the UK’s new status as a share buyback powerhouse could encourage international investors to return to its neglected stock market.

The Janus Henderson UK equity income managers referred to a report from Barclays Capital that showed FTSE 100 blue chips bought back 2.2% of their shares in the year to May, whereas S&P 500 companies in the US, which has a stronger tradition of buybacks over dividends, repurchased just 1.5%.

The UK’s pick-up in buybacks has helped deliver strong capital returns, given the market’s 20% valuation discount to international peers. The managers said the FTSE 100 had beaten the S&P 500 since the Bank of England started hiking interest rates in December 2021. Morningstar data confirms the FTSE 100 has achieved a total 25% return against 23% from the US benchmark.

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