INVESTMENT STRATEGY
SMALL CAPS
COMPARING TRUSTS
WITH OPEN-ENDED
FUNDS ON A SHARE
PRICE VERSUS NAV
BASIS IS A “FALLACY”
16
trustnetdirect.com
trustnetdirect.com
IT UK Smaller Companies (133.15%)
100%
80%
60%
40%
20%
0%
Mar 15
Sep
Mar 14
Sep
Mar 13
-20%
Sep
Innes Urquhart, a research analyst
at Winterflood, says that smaller
companies is one area of the market
in which the closed-ended structure
can really add value to the overall
investment process.
“Because the funds are closedended, the respective managers
have no worries about inflows and
Williams launched the Miton UK
MicroCap trust in April this year.
It raised £50m during its initial
public offering and has now grown
to £59m. At launch, the manager
said the investment trust structure
added real value for shareholders as
it meant he did not have to worry
about inflows and outflows.
While noting the benefits of
investment trusts, City Asset
Management’s head of research
James Calder says comparing them
with open-ended funds on a share
price versus NAV basis is a “fallacy”
in terms of what you end up with.
“If you compare NAV versus NAV,
you will find that the performance is
probably a lot closer,” he explained.
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