The £3billion City of London investment trust has become the first to increase its annual dividend for sixty years in a row.

Fund manager Job Curtis has run the portfolio for 35 years, throughout every market cycle since the privatisations of the early 1990s.

He has achieved his remarkable record by investing in UK-listed companies and steering clear of AI.

Speaking exclusively to the Mail, he said: ‘I don’t really invest in AI. It’s horses for courses. There are plenty of tech funds for that sort of exposure.

‘I just can’t predict an AI bust but people are right to be wary of the scale of spending. It's truly astonishing.

‘The US hyperscalers are spending collectively over $600 billion this year alone, and there's a real question about the returns on that.

‘It could be safer to invest in companies that will benefit from the productivity gains and cost savings, such as the banks.

‘We did own Microsoft a few years ago and we made around ten times our money. It is a great company, but we felt that for our investors we could recycle the money into cheaper UK shares.’

The trust’s ever-increasing dividend run began in 1966, the year Bobby Moore’s England team won the World Cup and the Beatles released their Revolver album.

If Sir Paul McCartney had invested £1,000 of his earnings from 1966 hits such as Paperback Writer, it would have grown to £1.3million today, assuming he had re-invested his dividends.

The same sum invested in the wider UK stock market would have grown to just £700,000.

Investors who took their dividend income instead of reinvesting it would have had nearly £56,000 over the six decades, compared with just £3,900 of interest on a bank or building society savings account.

More recently, the share price total return over one year is 24.5 per cent and 92 per cent over five years.

Curtis has more than 90 per cent of the portfolio invested in UK shares. These have been out of favour with international investors who have piled into high-risk US tech stocks.

‘The banks are quite prominent in our top ten holdings at the moment, and I think it's a good period for them,’ he said.

‘We believe in diversification, not concentration. Our biggest single area is financials. We've got decent holdings in life insurance. We have some big positions in consumer staples and we quite like the tobacco stocks and oil companies.’

His top ten holdings include banks HSBC, Lloyds and NatWest, fund manager M&G, oil giants BP and Shell, Tesco, Unilever and tobacco group BAT.

City of London relentlessly hiked its dividends despite the inflation shocks of the 1970s, the 1987 crash, the dotcom bust in 2000, the global financial crisis in 2008 and most recently the Covid 19 pandemic.

Curtis argues that a consistently rising dividend ‘is good discipline’ rather than creating a risk of weakening the fund by paying out too much in bad years.

‘The trick is to have companies that pay out decently but are also investing enough for the future, because you want future profit growth too,' he said.

‘We smooth out the ups and downs.

‘In a good year for dividends, an investment trust can hold back up to 15 per cent of the income coming in and put it into reserve. Then in the bad years we can draw down on it.

‘In 2020 when Covid hit there were huge dividend cuts across the market. FTSE dividends were down heavily but we did not have to cut.

‘We had to draw down about 21 per cent of that year's dividend from reserves. But we kept the record going, and more recently we've been able to replenish the reserves.’

He has been buying more shares recently in data analytics company RELX, which has been hammered due to fears its business will be undermined by AI.

Similarly, he has built a stake in credit rating agency Experian.

‘We've held RELX for many years and it's done really well over the long term, though it's had a tough 12 months,' said Curtis.

'I think some of the concern is overdone. After the share price fall we bought more. I also bought back into Rightmove earlier in the year.

‘We're fairly conservative, so we like companies with good cash generation, that matters when gilt yields are a concern as they are now. We set the portfolio to avoid highly indebted companies and focus on cash generation.’

No doubt to the relief of his thousands of private investors including this writer, who has a small stake, the 65-year-old Curtis has no plans to retire.

Trust chairman Sir Laurie Magnus said: ‘The dividend was increased, for the 60th consecutive year. This continues City of London’s unique leadership in delivering the longest record of consecutive annual dividend increases in the investment trust sector.

‘It has been achieved by investing predominantly in the UK stock market and by harnessing the benefits of the investment trust structure including the facility to use revenue reserves and to raise low-cost long-term debt.

‘It has also been achieved through the exemplary custodianship of the fund management team, led by Job Curtis, who has consistently steered the portfolio through unpredictable market challenges over a tenure of 35 years with skill, humility and commitment. The board is determined to maintain this leadership position over the years ahead.’