27th Jan 2025 09:45
(Alliance News) - Smithson Investment Trust PLC on Monday described its 2024 performance as "far from what we expected", as total return per share on net asset value was well short of the company's benchmark.
Total NAV return per share was 2.1% last year. This compared to 12% for the MSCI World Small & Mid Cap index.
The London-based investment firm said: "After a strong market sell-off in the last few days of the year, our final performance for 2024 can only be described as mediocre."
This is the second time since the trust's inception in 2018 that it ended the year behind its the reference index, the company noted.
Smithson's annualised NAV return since inception is 8.2%.
"Our individual performance detractors were not particularly severe," Smithson explained. "Instead, it was a lack of outstanding winners getting the portfolio motoring; the top performer this year would have ranked only 5th on last year’s hit list."
The investment trust will address underperformance by prioritising smaller companies, it said: "While we were concentrating on companies of GBP500 million to GBP15 billion in market capitalisation, we now believe our attention should be placed into businesses in the lower half of this range, driven by the fact that many of our companies have grown quite large during our period of ownership."
Smithson also plans to hone in on "high-growth sectors" such as biotechnology, artificial intelligence, electrified transport, aerospace and data management.
The fund's industrial sector weighting was 42% in 2024, up from 36% the year prior, while information technology was down to 20% from 28% in 2023.
North America brought in 51% of the revenue of its portfolio companies during period, up from 41% the previous year. In response, Smithson increased exposure to US companies to 50% from 45%.
Promising "to leave no stone unturned" in the hunt for new investments, Smithson said it remains confident of future improvement.
Smithson shares were down 1.4% at 1,503.10 pence each on Monday morning in London.
By Holly Munks, Alliance News reporter
Comments and questions to [email protected]
Copyright 2025 Alliance News Ltd. All Rights Reserved.