Income focused investment trust City of London said the year to end-June 2009 had been a difficult one for the company, especially in 2009 when low-yielding cyclical stocks returned to fashion with a vegenance.

'Relative to the index, it has been a year of two halves. In the first half, the net asset value total return outperformed by 6.4 percentage points as a result of the defensive bias in the portfolio. In the second half, low yielding cyclical stocks led the market, especially the large mining sector,' the chairman, Simon de Zoete, said.

Net asset value (NAV) per ordinary share at the end of June 2009 stood at 205.68p, compared to 274.39p at the end of June 2008.

Revenue return per share was 13.15p, a decrease of 2.8%. Despite this, the investment trust increased its dividend for the forty-third consecutive year, upping it by 6.2% to 12.32p.

'As anticipated in my half year statement, many companies have cut or passed their dividends since January 2009. This has an impact on the range of companies that our manager can prudently include in the portfolio because our priority is to invest in quality companies with good dividend payment potential,' De Zoete said. 'Current valuations of many of these companies are attractive by historic standards as are their dividend yields,' he added.

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City of London Inv Trust (CTY) share price