Update from QuotedData

Montanaro UK Smaller Companies - Update from QuotedData

29th April 2025

High growth, bigger yield

Montanaro UK Smaller Companies (MTU) has adopted a new enhanced dividend policy, paying out 1.5% of net asset value (NAV) every quarter. This will make it one of the highest-yielding UK equity strategies on the market. For traditional equity income investors, whose portfolios tend to be tilted towards more value-focused cash-generative stocks, MTU's combination of a high dividend yield and a strong focus on quality growth stocks differentiates it from peers.

UK equities were cheap relative to their history and to developed market peers prior to the tariff-related sell off; now they are even cheaper. In addition, the quality-growth small-cap stocks in which MTU invests have been out of vogue recently, with the market favouring large-cap value stocks instead.

As MTU's manager Charles Montanaro points out, the historic valuation gap provides investors with an attractive entry point. History has shown that buying stocks on these sorts of valuations can produce attractive long-term returns, and the magnitude of the discount of the UK's equity market relative to other developed global equity markets could in itself be a catalyst for the UK market to rerate.

Full Research:

https://quoteddata.com/research/montanaro-uk-smaller-companies-high-growth-bigger-yield-qd/

This research is also available free on our website www.quoteddata.com where you will also find news, performance data and factsheets on every London listed Investment Company. QuotedData writes and distributes research on a number of quoted companies, facilitates meetings between those companies and existing and potential investors and assists in raising additional capital where required.

NB: Marten & Co was paid to produce this note Montanaro UK Smaller Companies Investment Trust Plc, and it is for information purposes only. It is not intended to encourage the reader to deal in the security or securities mentioned in this report. Please read the important information at the back of this note. QuotedData is a trading name of Marten & Co Limited which is authorised and regulated by the Financial Conduct Authority. Marten & Co is not permitted to provide investment advice to individual investors categorised as Retail Clients under the rules of the Financial Conduct Authority.

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