Dunedin Smaller Companies has announced results for the year ended 31 October 2015. over this period the fund underperformed the FTSE Small cap (ex Investment Companies) Index, returning 10.7% on net assets against 13.1% for the benchmark, but a narrowing of the fund’s discount, from 16.9% to 15.0%, gave shareholders a 13.7% return. The dividend has been increased from 5.25p to 6p.
The chairman says much of the recent underperformance of the NAV relative to the benchmark index was due to the portfolio’s overweight position in the industrial sector (a very broad sector comprising companies with a wide range of end markets). “Some of the companies in the portfolio have had a disappointing year“.
Ed Beal’s manager’s report is fairly extensive and goes into great detail about the economy, what he bought and sold and, oddly for a fund that isn’t an income fund, has quite a lot about dividend increases and reductions. However there is no attribution analysis and so, beyond the Chairman’s comments, we aren’t able to ascertain why the fund underperformed its benchmark during the period.
DNDL : Dunedin Smaller underperforms as some companies have disappointing year