20th Sep 2019 12:30
(Alliance News) - Aberdeen Smaller Cos Income Trust PLC said Friday it outperformed its benchmark index in the first half of 2019, driven by supportive market conditions and strong stock selection.
The trust's net asset value total return was 18.1% for the six months to the end of June, outperforming the FTSE SmallCap Index excluding Investment Companies, which returned 6.1% in the period.
Following discussions with its investment manage, Aberdeen Standard Fund Managers Ltd, Aberdeen Smaller will change its current benchmark index to the Numis Smaller Cos ex Investment Trusts Index, with effect at the start of 2020.
The trust said this change is due to the Numis index having more relevance to the current holdings in its portfolio.
Net asset value per share as at June 30 was 332.31 pence, up 17% from 285.18p at the end of 2018.
Aberdeen Smaller's share price at the end of June was 288.00p, reflecting a 13% discount to net asset value.
Shares in the trust were down 1.3% on the day Friday at 270.40 pence, having declined further since the year-end.
Aberdeen Smaller Cos increased its first and second quarterly dividend to 1.95 pence each, up 8.3% from 1.80p the year before.
The trust said its strong performance was due to its strong stock selection, with software engineering business Aveva Group PLC continuing to perform strongly. Intermediate Capital was also a positive contributor, with a rise in earnings and dividend expectations.
Other strong contributors came from Dechra Pharmaceuticals PLC and recent investment in Games Workshop PLC.
"Uncertainty remains in both political and economic markets globally, with the UK at elevated levels due to Brexit and Prime Ministerial changes. UK smaller companies markets have come under pressure given the perception of their domestic focus, however more recent news flow on US-China trade tensions highlights there are concerns across regions," said Chair Robert Lister.
"Following many years of bull markets, we are without doubt closer to the next downturn than the last. The manager's investment process, based on bottom up stock selection rather than macro views, should guide us well through more difficult markets," Lister added.
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