Trustnet Magazine Issue 37 February 2018 | Page 26

/ SECTOR PROFILE /
24
BlackRock Smaller Companies IT (423.86%)
400% Standard Life UK Smaller Companies Trust (487.15%)
300%
FTSE All Share (98.08%)
200%
100%
0%
-100%
“For those who can stomach
volatility and are willing to
focus on the long-term, we think
Aberforth Smaller Companies
is an interesting proposition at
this stage,” says Paget. “It is the
most value-orientated member of
either the open- or closed-ended
sectors and is managed by a highly
experienced and well-resourced
team with a strong track record.”
“However, thanks to this
value style (and though it has
outperformed its benchmark), it
has struggled to keep pace with
many of its peers over the past five
years (and in 2017 in particular).
We think value investing is
due a long-term return to form
500%
THE STOMACH FOR IT
PERFORMANCE OF TRUSTS VS INDEX OVER 10YRS
IT counterpart. Over longer
time periods, however, this
performance gap reverses, and
does so significantly. The average
open-ended small cap fund has
made 58.92 per cent, 104.23 per
cent and 205.43 per cent over
three, five and 10 years, compared
with 67.05 per cent, 117.7 per
cent and 244.57 per cent from its
closed-ended counterpart.
There is clearly a growing sense
of complacency among investors
and this leaves equities open to a
correction
(whether that be from an absolute
or relative perspective) following
a long period in the doldrums
and, in such an environment,
Aberforth should be a prime
beneficiary.”
Winterflood added The
Mercantile Investment Trust to
its mid and small cap exposure in
the 2018 rebalancing of its model
portfolio, replacing the River &
Mercantile UK Micro Cap trust.
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