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IN BRIEF: Global Smaller Cos asset value down but beats benchmark

20th Jun 2022 09:28

Global Smaller Cos Trust PLC - London-based investment company, formerly BMO Global Smaller Cos - Outperforms benchmark despite net asset value declining slightly. NAV total return at April 30 is negative 0.2% in the financial year that ended April 30, compared to its benchmark's 3.2% fall.

"Long-term returns of both NAV and share price continue to be favourable," the FTSE-250 listed trust says.

The trust's benchmark is the 30% Numis UK Smaller Cos excluding investment companies Index/70% MSCI All Countries World ex UK Small Cap Index. NAV per share slips to 172.8 pence from 174.9p a year ago. Proposes a total dividend of 1.84 pence per share, up 5.1% to a year ago.

"With inflation increasingly prevalent, a number of emerging market central banks moved to tighten monetary policy early in the year. Eventually, the US Federal Reserve also signalled a plan to increase interest rates to curb inflation, having abandoned the view that higher prices would be transitory.

"This prompted a sharp increase in global interest rates and bond yields, feeding into lower equity prices, which were then further undermined by developments in Eastern Europe," Global Smaller Cos says. Adds that technology and biotechnology stocks were hit hard and that established and lower rated stocks performed better.

Regarding its outlook, firm says corporate earnings are under pressure due to recent events such as the war in Ukraine and high inflation. "Continuing to monitor individual companies' newsflow and their success in dealing with higher inflationary pressures will remain key," it explains.

Current stock price: 140.36 pence, down 1.0% on Monday

12-month change: down 13%

By Tom Budszus; [email protected]

Copyright 2022 Alliance News Limited. All Rights Reserved.

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