11th Aug 2014 15:01
LONDON (Alliance News) - Montanaro UK Smaller Companies Investment Trust PLC Monday said its net asset value declined by 7.7% over the three months to the end of June, compared with a decrease of 4.8% by its benchmark, the Numis Smaller Companies Index (excluding investment companies).
After outperforming the FTSE All Share index by 4.6% during the first three months of the calendar year, the benchmark underperformed by 6.1% over the subsequent quarter ended June 30, according to the trust's statement.
"This was the fourth weakest quarter for SmallCap in relative terms over the last decade. Investors have turned noticeably more cautious, locking in profits on UK smaller companies and recycling the proceeds into larger companies, perceived as safer and offering better liquidity. Unnecessary - and value destroying - portfolio turnover is often the natural human reaction to uncertainty," Montanaro Asset Management Ltd said.
"However, we see little reason to make material changes to the portfolio in the months ahead, as our investee companies feel cautiously optimistic at present. Pleasingly, consensus earnings growth expectations for 2014 for the portfolio have risen over the course of the quarter from 9.8% to 11%. We will give them the time to deliver," Montanaro Asset Management added.
The trust aims to grow capital by investing in small quoted companies listed on the London Stock Exchange or traded on AIM, and to outperform its benchmark.
Shares were Monday quoted up 1.1% at 451.82 pence.
By Samuel Agini; [email protected]; @samuelagini
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Montanaro Uk