Another banner year for BlackRock Smaller Companies Trust - annual report summary

BlackRock Smaller Companies Trust (BRSC) targets long-term capital growth through investment in smaller UK-quoted companies. The maximum permitted exposure to Aim was recently increased from 40 to 50 per cent. Its report and accounts for the year to 28 February 2017 show shareholders’ funds of £597 million.

Mike Prentis has been manager since August 2002. He employs a combination of top-down and bottom-up analysis. He and his team look for significant upside from well-run, cash-generative, dividend-paying growth companies with strong balance sheets and good share price momentum. Only two holdings exceed 2 per cent of assets.

Prentis often favours firms that are smaller than the average for BRSC’s benchmark, the Numis Smaller Companies plus Aim index. At the end of February, close to half the portfolio was in companies capitalised at less than £400 million. Exposure to the UK economy was reduced in the second half of 2016 by cutting holdings in retailers, challenger banks, wealth managers and software firms. Gearing averaged 7.8 per cent over the year, contributing 2 per cent to relative outperformance. Ongoing charges were 1 per cent. There is no discount control target.

Last year’s NAV total returns of 27.9 per cent were well ahead of the 23.6 per cent total return for the trust’s benchmark. The dividend was raised 20 per cent to 21p, and the share price total return was 25.4 per cent. BRSC has outperformed its benchmark and raised its dividend every year for 14 years. Over that period its NAV has grown nearly tenfold.


Keep up to date with all the latest personal finance news and investment tips by signing up to our newsletter. Email subscribers will also receive a free print copy of Money Observer magazine.

Subscribe to Money Observer Magazine

Be the first to receive expert investment news and analysis of shares, funds, regions and strategies we expect to deliver top returns, plus free access to the digital issues on your desktop or via the Money Observer App.

Subscribe now

Add new comment