BlackRock Smaller Companies Trust has a strong performance record, beating both its index, the Hoare Govett Smaller Company Index plus AIM and its Association of Investment Companies (AIC) sector, UK Smaller Companies, over one, three and five years. A big part of this outperformance has been its use of gearing.
The flip side of gearing up is that it has resulted in some periods of underperformance, such as May this year, which the trust's manager Mike Prentis says was a poor month for stock markets around the world. With the trust geared between 10 and 12 per cent for some time, a benchmark fall of 7.3 per cent in May meant gearing accounted for 0.8 per cent of underperformance.
However, Mr Prentis says he is encouraged by data which shows that global gross domestic product (GDP) growth is above three per cent, led by Asia Pacific, emerging markets and North America, which the trust's portfolio should benefit from. The trust is well diversified in terms of sector exposure, though it has considerable positions in industrial metals, mining and software & computer services. Top 10 holdings including Canada's Western Coal, and FTSE 250 companies Aveva Group and Fidessa Group.
The trust has performed fairly well since it moved from 3i to BlackRock at the end of 2004, according to Winterflood, whose smaller companies team also manages Throgmorton Trust. Currently, the trust's discount is wider than its historical and sector average, at more than 18 per cent.
BLACKROCK SMALLER COMPANIES TRUST (BRSC) | |||
---|---|---|---|
PRICE | 320.5p | PRICE DISCOUNT TO NAV | 18.6%* |
SIZE OF FUND | £153m** | 1 YEAR NAV PERFORMANCE | 42.8%* |
No OF HOLDINGS: | 49 | 3 YR NAV PERFORMANCE | -18.5%* |
SET UP DATE | May 1906* | 5 YR NAV PERFORMANCE | 51.1%* |
MANAGER START DATE | Sep 2002** | TOTAL EXPENSE RATIO | 1.20% |
3 YR BETA | 0.9 | YIELD | 1.43% |
3-YR SHARPE RATIO | -0.09 | GEARING | 11.5%* |
NAV | 397.03p* | MORE DETAILS | www.blackrock.co.uk/its |
Source: Morningstar, *BlackRock, **Winterflood
Performance figures as at 5 July 2010
Top 10 holdings as at 31 May 2010
Holding |
---|
Abcam Group |
Aveva Group |
Brewin Dolphin Holdings |
Domino Printing Sciences |
Fidessa Group |
ITE Group |
Rotork |
Spirax-Sarco Engineering |
Victrex |
Western Coal |
Sector Breakdown
Sector | Percentage |
---|---|
Industrial Metals & Mining | 11 |
Software & Computer Services | 10.5 |
Financial Services | 8.6 |
Oil & Gas Producers | 8.6 |
Electronic & Electrical Equipment | 7.3 |
Support Services | 6.8 |
Industrial Engineering | 6.6 |
Pharmaceuticals & Biotechnology | 5.5 |
Technology Hardware & Equipment | 5 |
Media | 4.7 |
Other | 25.4 |