Dominic Younger
Dominic Younger is the fund manager for CT UK Capital and Income Investment Trust, having joined Columbia Threadneedle in 2013. Dominic began as Fund Manager in January and had worked with the previous manager, Julian Cane since 2021 on the UK equities desk.
Here, Dominic gives us an update on the evolution of the Trust’s portfolio looking at areas of evolution in a changing macro environment.
Since taking over the management of the CT UK Capital & Income Investment Trust, my priority has been to build on what the trust already does well while applying a clear, disciplined investment framework to the portfolio. The trust’s long‑standing focus on sustainable income alongside long‑term capital growth remains unchanged, but recent months have provided the opportunity to refine holdings, reassess conviction levels and ensure the portfolio is positioned appropriately for the next phase.
This update outlines how the portfolio is evolving under my stewardship. Rather than pursuing wholesale change, the emphasis has been on selective adjustments: trimming positions where value has been realised, exiting holdings where the investment case has become less clear, and introducing new ideas that better reflect our valuation discipline and long‑term outlook. Throughout, the guiding principle has been to remain patient, pragmatic and focused on fundamentals, particularly during a period when external noise can easily distract from underlying business performance.
Since taking over the trust, we have focused mainly on fine tuning the portfolio to capitalise on the opportunity ahead as we see it. For example, One Savings Bank, a specialist lender, has been a long-standing position, delivering over 480% total return since CTUK picked up shares on float in 2014. While it remains a large position in the trust, we have taken some profits to reinvest in new ideas. We have also sold Experian, which is facing structural questions about the defensibility of its market position in the world of generative AI.
In terms of expanding the portfolio, we have been deliberately selective in identifying new opportunities. Our focus is on out‑of‑favour companies, often those undergoing periods of meaningful transition, where the market struggles to price future cash flows with confidence. In these situations, rigorous analysis and patience can create highly attractive entry points. What matters to us is not only participating in the early phase of a turnaround, but remaining invested as these businesses progress beyond their recovery and ultimately become the capital growth engines of the portfolio.
Rentokil is a great example of this type of opportunity. As a high‑quality pest‑control business experiencing temporary challenges, we see it as a compelling contrarian prospect. With fundamentals beginning to stabilise, we have decided to build up the trust’s existing position as the pieces fall into place for a recovery in its underlying business. In addition, we have introduced new positions such as precision engineering firm IMI, alongside Imperial Brands and Standard Chartered, high‑conviction ideas drawn from our broader investment funds that we are excited to bring into the trust.
This disciplined stock selection has naturally led to a portfolio with greater exposure to the domestic UK economy than the wider market, with around 40% of underlying revenue now generated from UK‑linked activity. What’s important here is that this domestic tilt is not a top‑down decision or a call on the UK economy itself. Instead, it is a by‑product of the opportunities we see among companies that are aligned with our investment philosophy: firms driving their own momentum, taking market share, and demonstrating genuine leadership in their categories.
Names such as Travis Perkins, ITV, Land Securities and Marks & Spencer fit this profile well. These are businesses with the scale, capability and competitive edge to shape and grow the markets in which they operate. While we are not expecting an economic resurgence overnight, good companies can thrive even in the absence of strong GDP growth. Our confidence in these businesses is rooted in their strategic positioning, disciplined execution and capacity to generate sustainable returns.
Overall, the changes made since I assumed responsibility for the trust reflect a considered and incremental approach to portfolio management. The emphasis has been on sharpening the trust’s focus on high‑quality businesses that are either undervalued or navigating periods of transition, while maintaining the income and risk characteristics that shareholders expect. The portfolio’s increased exposure to domestically focused companies is a natural outcome of this stock‑led process rather than a macroeconomic call, with capital allocated where we see strong competitive positions, improving fundamentals and the potential for long‑term value creation. By recycling capital thoughtfully, maintaining conviction where it is warranted, and remaining disciplined in the face of uncertainty, we believe the trust is well positioned to continue delivering for shareholders.
Dominic Younger
Fund Manager, CT UK Capital and Income Investment Trust
Investment risks
There is no guarantee that dividends will continue to increase. The value of your investments and any income from them can go down as well as up and you may not get back the original amount invested. Gearing is used for investment purposes to obtain, increase or reduce exposure to an asset, index or investment. The mention of any stocks and bonds is not a recommendation to deal. All information is sourced from Columbia Threadneedle Investments, unless otherwise stated.
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