City Merchants High Yield Trust Limited 
Interim Management Statement 
for the Three Months ended 31 March 2013 
Objective of the Company 
The investment objective of City Merchants High Yield Trust Limited (the
`Company') is to seek to obtain both high income and capital growth from
investment, predominantly in high-yielding fixed-interest securities. 
The Company seeks to provide a high level of dividend income relative to
prevailing interest rates through investment in fixed-interest securities,
various equity-like securities within fixed-income markets and equity-linked
securities such as convertible bonds and in direct equities that have a high
income yield. It seeks also to enhance total returns through capital
appreciation generated by investments which have equity-related
Material Events 
No material events, specifically in relation to the Company, occurred during
the period. 
As set out in the recently published annual financial report, the Company paid
a third interim dividend of 2.5 pence per ordinary share on 28 February 2013 in
respect of the period ended 31 December 2012. The Company has declared a first
interim dividend, in respect of the year ended 31 December 2013, of 2.5 pence
per ordinary share which will be paid on 24 May 2013, to shareholders on the
register on 26 April 2013. The Board continues to target total dividends of 10
pence for the current year. 
Market background 
Following a strong performance in 2012, the NAV of the investment trust
continued to rise in the first quarter of 2013. Income was an important factor
in total return and the relatively high coupons of high yield bonds made them
one of the strongest areas of the bond market. Subordinated bank capital was
also strong. 
According to data from Merrill Lynch, European high yield bonds had a total
return in the quarter of 5.5% (in sterling terms), the aggregate yield for the
sector falling 8 basis points to 5.70%. Returns were boosted by the weakness of
sterling. In local currency terms European high yield bonds returned 1.8%. This
compares to 1.7% for sterling investment grade corporate bonds and 0.6% for
Gilts. Within investment grade, financials outperformed, returning 2.1%
compared to 1.5% for non-financials. Sterling Tier 1 subordinated bank debt was
the best-performing part of the market with a return of 3.0%. Investor appetite
for credit risk remained strong throughout the period, driven by the relatively
high levels of yield available in a generally low yield and low interest rate
environment. Macroeconomic data continues to point to only modest levels of GDP
growth in the major developed economies, especially in Europe. This is keeping
interest rate expectations low, supporting low yields. Meanwhile, the success
of the actions of the European authorities over the past year to address
systemic fears relating to the single currency has been reflected in the muted
market reaction to ongoing political uncertainty in Italy and the Cypriot bank
bail-out. In these supportive market conditions, bond issuance has been strong.
Barclays estimate that there was a total of £21bn of new high yield bond 
across European currencies in the first quarter, 18% up on the same period in
2012. According to Moody's, the European 12 month trailing high yield default
rate moved lower in the first quarter, ending March at 1.8% compared to 2.0% in
Q4 2012 and 3.3% a year ago. 
Portfolio strategy & outlook 
The high yield bond market has achieved strong returns in recent quarters and
the asset class is now considerably more fully valued. Yields and credit
spreads have fallen and many newly issued bonds are coming to market with very
low coupons by historical standards. The overall theme of our portfolio has not
changed greatly. The core of our portfolio is made up of a selection of high
yield bonds from seasoned issuers that we believe have relatively low default
risk. We continue to favour financials, most notably subordinated bank capital.
Rising capital levels, ongoing structural reform and implementation of new,
more conservative banking sector regulations should be supportive of this area
of the market for many years. In our opinion, aggregate yields on this type of
debt offer value. We believe that our portfolio can continue to provide an
attractive level of income. On the other hand, from current price levels we see
limited potential for capital appreciation and we are also seeing some evidence
of weaker earnings and a poorer outlook for growth. Given this, we are not
employing any leverage in the fund and we have an allocation of just over 5% to
Trading in the portfolio over this quarter included trimming and selling some
positions where we had seen strong capital appreciation, adding some new
positions and participating in new issues, including refinancing operations by
issuers we already held. For example, we trimmed our holding in Novae Group
6.5% (insurance) and our position in Intergen 9.5% (utility). We added a
position in Telekom Austria 5.625% floating rate (telecom) and participated in
the DFS 7.625% (retail) new issue. 
Paul Read, Paul Causer 
Portfolio Managers 
April 2013 
Performance - Total Return 
                           3 Months    1 Year      3 Years     5 Years     
Share Price                    2.0%        7.4%        25.7%       62.9%       
Net Asset Value                4.5%        16.4%       28.0%       74.6%       
FTSE All-Share Index           10.3%       16.8%       28.7%       38.5%       
FTSE Government Securities -   0.7%        5.3%        26.7%       40.9%       
All Stocks Index                                                               
Source: Thomson Reuters Datastream 
Share Price and Discount 

                              As at           For the Three Months Ended       
                              31 March        31 March 2013                    
                                              High       Low        Average    

Ordinary Shares mid-market    165.50          179.00     164.00     171.00      
price (pence)                                                                   
Discount                      6.2%                                              
Source: Thomson Reuters Datastream 
Assets and Gearing 
                         31 March 2013          
Total Gross Assets (£m)      128.4                  
of which cash (£m)           6.1                    
Borrowings (£m)              -                      
Cum Income Net Asset Value   176.4                  
Gross Gearing                0.0%                   
Net Cash                     4.8%                   
`Gross Gearing' reflects the amount of gross borrowings in use by the Company
and takes no account of any cash balances. It is based on gross borrowings as a
percentage of shareholders' funds. `Net Cash' reflects the net exposure to cash
and cash equivalents expressed as a percentage of shareholders' funds after any
offset against its gearing. 
Bond Rating 
                         31 March 2013          
AA-                          0.0%                   
A+                           0.0%                   
A                            0.0%                   
A-                           2.0%                   
BBB+                         5.3%                   
BBB                          7.4%                   
BBB-                         9.2%                   
BB+                          6.5%                   
BB                           12.5%                  
BB-                          9.1%                   
B+                           11.8%                  
B                            5.9%                   
B-                           3.3%                   
CCC+                         1.6%                   
CCC                          0.4%                   
CCC-                         0.0%                   
CC                           0.0%                   
C                            0.0%                   
D                            0.0%                   
NR (including equity)        25.0%                  
Top Ten Holdings 
Ranking   Top Ten Holdings                                      % of 
Now                                                        Portfolio 
1         LBG Capital        7.975% Sep 2024 & 6.439% May       6.1% 

                             2020 & 6.385% May 2020 & 9%            
                             Dec 2019 & 16.125% Dec 2024            

2         Aviva              6.125% Perpetual & 8.875%          4.2% 
3         Société Genérale   8.875% FRN Perpetual               3.5% 
4         Premier Farnell    89.2p Convertible Preference       3.3% 
5         General Motors     Wts Jul 2019 & Wts Jul 2016        3.3% 
6         Vedanta Resources  8.25% Jun 2021 & 4% Cnv Mar        2.6% 
7         Intesa Sanpaolo    8.375% FRN Perpetual               2.3% 
8         Abengoa            8.5% Mar 2016 & 4.5% Cnv Feb       2.3% 

                             2017 & 6.875% Cnv Jul 2014 &           
                             6.25% Cnv Jan 2019                     

9         Credit Agricole    7.589% FRN Perpetual & 8.125%      2.2% 
                         FRN Perpetual                           
10        Balfour Beatty     10.75p Convertible Preference      2.0% 
Changes to Share Capital 

                             Ordinary Shares of no par  
                             Issued        Treasury     

As at 31 Dec 2012            72,786,327    0             
Ordinary shares bought back  0             0             
Ordinary shares issued       0             0             
As at 31 March 2013          72,786,327    0             
The Company has authority to buy back shares and to issue new shares
(disapplying pre-emption rights), in each case within specified limits. The
Company expects to renew these authorities each year. 
Price and Performance 
The Company's Ordinary shares are listed on the London Stock Exchange and the
price is published in the Financial Times under `Investment Companies' and in
the Daily Telegraph under `Investment Trusts'. 
The Company's net asset value is calculated daily and can be viewed on the
London Stock Exchange website at 
Further information can be obtained from Invesco Perpetual as follows: 
Free Investor Helpline: 0800 085 8677 (available Monday to Friday from 8.30am
to 6.00pm) 
Internet address: 
The information provided in this statement should not be considered as a
financial promotion or recommendation. 
Issued for and on behalf of City Merchants High Yield Trust Limited 
Hilary Jones 
R&H Fund Services (Jersey) Limited 
Telephone: 01534 825323 
16 April 2013 
-0- Apr/16/2013 13:27 GMT
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