Highlights

• CQS New City High Yield Fund paid 4.52p per share in four dividends with ex-dates inside the window.

• The board says it has raised the Dividend every year since the fund launched in 2007.

• A larger 1.52p fourth interim in July lifted the total above the 1.0p quarterly rate.

• The latest declared interim of 1.0p goes ex-dividend on 29 October 2026 and is paid on 27 November.

Few funds can say they have lifted their dividend every year for nearly two decades. CQS New City High Yield Fund (LSE:NCYF) says exactly that, citing every year since its 2007 launch. Over the past twelve months it paid 4.52p per share, a trailing yield of about 9.40% at an approximate price of 48.10p.

The four payments

Three quarterly payments of 1.0p went ex-dividend on 22 January, 30 April and, for the latest declared, 29 October 2026, with payments on 27 February, 29 May and 27 November. A larger fourth interim of 1.52p went ex on 30 July 2026 and was paid on 28 August. The four dates sum to 4.52p. None was labelled special. For holders of LSE:NCYF, the larger July payment is the item that stands out.

Yield and the price used

The price used is a sell price of 48.10p, with a previous close of 48.00p, though the page shows no date. At 48.10p the paid yield is 9.40%. The fund itself quoted a Dividend Yield of 8.95% as at 30 September 2026, and its July factsheet gave 8.91%. The paid yield is higher than these because the larger July payment is included in the trailing total.

Portfolio and premium

The July factsheet showed the fund 84.9% in fixed income and 15.1% in convertibles, company shares and preference shares, with gearing of 9.06%. The share price of 50.30p stood above net asset value of 47.03p, a premium of 6.95% at the end of July. The top ten holdings made up 35.87% of net asset value. Management is by Manulife | CQS Investment Management, co-managed by Ian Francis and Darren Toner.

How a high yield bond fund earns income

The fund lends to companies through bonds that pay higher interest than safer borrowers because of the greater risk of default. The interest it collects, after costs and the cost of borrowing, is passed on to shareholders as dividends. Holding many bonds spreads the risk of any single default, but a downturn that raises defaults would reduce income.

Risks to the record

The fund invests mainly in high-yielding fixed interest securities, so its income can fall if borrowers default or if bond yields fall. Gearing magnifies both gains and losses. A trust that pays a premium to net asset value can see that premium narrow. A history of rises is encouraging, but no future increase is promised.

Putting 4.52p in context

A holder at roughly 48.10p received 1.0p in February, 1.0p in May, 1.52p in August and 1.0p in the November payment. The 1.52p fourth interim was the largest in the series, and its size is why the total of 4.52p exceeds a plain four times 1.0p. It also explains why the paid yield of 9.40% is higher than the yield of 8.95% quoted by the fund at the end of September.

Premium risk

Buying shares at a premium means paying more than the value of the assets. If sentiment cools and the premium disappears, the share price can fall even when the dividend is paid. The gap between 50.30p in July and about 48p now shows that the price can move, and investors should compare the price with the latest net asset value.

Tax on dividend income

In the UK, dividends outside an ISA or pension may be subject to tax above the annual dividend allowance, with rates that depend on the investor's income band. Shares held in a tax-advantaged account may shelter the income. Allowances and rates can change from one tax year to the next, so investors should check the current rules and consider their own circumstances.

Inflation and the real value of income

A dividend that stays the same loses buying power when prices rise. If Inflation runs at 3% a year, a payment of 10p is worth about 7.4p in today's money after ten years. Companies that raise their dividends at least in line with inflation help to protect the real value of the income. Investors can compare the growth in the payment with the rate of inflation.

Dividend cover

Dividend cover measures how many times Earnings Per Share exceed the dividend per share. A figure above 1 means earnings are larger than the payment, and a figure below 1 means the company is paying out more than it earned. Cover is a useful guide, but Cash Flow also matters, because dividends are paid in cash, and one-off items can distort earnings in a single year.

What to watch next

The next steps are the fund's first 2027 interim payments, which began with the 1.0p declared in October. Investors in LSE:NCYF should follow the premium or discount, the level of defaults in the portfolio and the board's comments on the Revenue reserve. A further rise in the dividend would extend the record.