30th May 2014 15:48
LONDON (Alliance News) - Montanaro European Smaller Companies Trust PLC underperformed its benchmark in the year to end-March, as its best performing stocks were at the cheaper, lower quality and more cyclical end of the market.
The trust saw a total return on net asset value per share of 6.1%, lagging its benchmark which saw a return of 28.2%.
The trust said that as confidence had returned to Europe demand for equities had increased, however mainly in stocks the market perceived as cheap.
"While the share prices of our investments have underperformed the market, their profits have not, a factor which gives us confidence for the future," the company said in a statement.
The strengthening of sterling against the Euro had an impact of around 28 pence, the company said.
Montanaro has recommended a total dividend of 7.00 pence, up from 6.75 pence.
The company said it continued to be confident in European stock markets, as loose monetary policy was likely to keep investor demand high and valuations of growth companies do not suggest the market is expensive.
Shares in Montanaro last traded at 526.50 pence.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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