/ FUND, PENSION, TRUST /
Trust
BLACKROCK
THROGMORTON TRUST
This AIC UK Smaller Companies trust trades on a hefty 17.5 per cent discount despite
boasting a strong long-term track record
18
over one, three, five and 10 years.
It has made 185.94 per cent over
the past decade, 33.03 and 111.98
percentage points ahead of its
sector average and benchmark,
respectively.
However, it has done so with
a maximum drawdown – which
measures the amount of money
lost if bought and sold at the worst
possible moments – of 67.48 per
cent over this time, compared with
52.69 per cent from its peer group
composite.
It saw significant losses during
the financial crisis of 2008, the
European debt crisis of 2011 and
again in 2014, when it finished the
year with losses that were twice
the size of its benchmark and
sector, at 10.87 per cent. As such,
this trust may be better suited to
patient investors with a long-term
time horizon or those who can
stomach higher levels of risk.
The managers of the
BlackRock Throgmorton Trust
are not afraid to use gearing
in order to boost returns – this
figure currently stands at 27 per
cent.
However, this strategy can
magnify losses as well as gains
and helps to explain the vehicle’s
high maximum drawdown.
The trust is currently yielding
1.7 per cent and has a total
expense ratio of 1.34 per cent,
including a performance fee.
FILE
MANAGERS: Mike Prentis, Richard
Plackett, Dan Whitestone, Lucy
Marmion
LAUNCHED: 02/12/1957
DISCOUNT/PREMIUM: -17.5%
TER: 1.34%
PERFORMANCE OF TRUST VS SECTOR
AND BENCHMARK OVER 10YRS
200%
BlackRock Thorgmorton Trust (185.94%)
150%
IT UK Smaller Companies (152.91%)
Numis Smaller Companies - AIM Excluding
Investment Companies (73.96%)
100%
50%
0%
-50%
-100%
T
HE BENEFITS OF USING A
CLOSED-ENDED FUND to
invest in less liquid areas of
the market, such as small caps,
are well documented.
Because small cap portfolios are
likely to hold a larger proportion of
the companies they invest in, open-
ended funds operating in this part
of the market may face problems
related to inflows and outflows.
This helps to explain why,
according to recent research from
Kepler, they tend to invest further
up the market cap spectrum as
they increase in size.
However, while investment trusts
lend themselves better to this
area of the market, with discounts
narrowing across many of the
highest-rated trusts in the sector,
bargains are few and far between.
One exception to this rule is the
BlackRock Throgmorton Trust,
which is currently on a discount of
17.5 per cent.
The trust – headed up by Mike
Prentis, Richard Plackett, Dan
Whitestone and Lucy Marmion
– aims to provide capital growth
through a portfolio of small and
medium-sized companies.
Its portfolio is well-diversified,
with its 10 largest individual
holdings accounting for 24.8 per
cent of total assets. These include
the likes of veterinary services
company CVS Group, JD Sports
Fashion and distribution service
4imprint Group.
BlackRock Throgmorton Trust
has comfortably outperformed its
Numis Smaller Companies AIM (ex
IT) index benchmark and AIC UK
Smaller Companies sector average
Source: FE Analytics
trustnetdirect.com