- BlackRock Smaller Companies Trust invests in high-quality growth companies
- This helps to mitigate the risk of smaller companies investing
- But the trust could lack peers and smaller companies indices in a cyclical or value-led recovery
A good smaller companies fund option is BlackRock Smaller Companies Trust (BRSC). Its managers look for growth companies with the potential to become much larger. They favour high-quality, cash-generative companies with strong management teams that are able to generate their own growth – regardless of the wider economic environment.
Around half of its holdings’ revenues are generated from overseas operations, which reduces UK economic risk. The trust is also well diversified with around 110 companies, helping to reduce stock-specific risk.