Sharp fall in funds under management at City of London

The emerging markets specialist, City of London Investment Group, has reported a big decrease in funds under management (FUM) for the the 12 months to the end of May.

The FUM figure was $4.48 billion (£2.91 billion) on May 31st, representing a 23% decrease in US dollar terms and an 18% decrease in sterling terms compared to the same point in 2011.

Over the same period the group's benchmark MSCI Emerging Markets Index decreased by 20% in US dollar terms.

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For the full year City of London expects pre-tax profits will be approximately £11.5m (2011: £13.1m), and that profits after an anticipated tax charge of £3.0 million will be around £8.5m. Market expectations are currently for profit before tax of £11.6m.

The group's dividend policy - to pay dividends which are covered approximately 1.5 times by earnings per share - remains unchanged. The board is recommending a final dividend of 16p per share (2011: 16p), which would bring the total for the year to 24p (2011: 24p).

By 9:53 City of London's share price had dropped 4.5%.

BS