SLS : Standard Life UK Smallers hit by rate rise fears
Standard Life UK Smaller Companies has published results for the year ended 30 June 2014 that show it underperforming its benchmark by some margin. Over the year the net asset value total return was 7.7% vs. 20.3% for the Numis Smaller Companies ex Investment Companies Index. The statement says that the damage was done in the last quarter of the fund’s accounting year as “valuations of quality growth smaller company stocks have been hit hard” in response to “the prospect of higher interest rates earlier than the market had previously anticipated”.
In addition, the rating of the company declined (it moved from trading at a premium to trading at a discount) and this restricted the return to shareholders to just 1.6%.
The dividend for the year has been upped by 11% to 4.5p.
A takeover bid for Kentz Corp (an oil services company) led to a 152% return on that stock for the fund. Hargreaves Landsdown, Safestyle, Andor Technologies and GB Group were also highlighted as contributing positively to returns.
On the downside, Paddy Power suffered from increased regulation, Waterlogic had setbacks in product development, Abcam saw slowing growth in its end markets, Blinkx fell after the publication of a negative piece of research and Xaar is suffering from increased competition.