During the six months ended 31 August 2016, BlackRock Smaller Company’s net asset value increased by 8.8% to 1079.28p per share, marginally underperforming its benchmark by 0.7%. The fund’s share price increased by 3.8% to 895.5p per share over the same period. The FTSE 100 Index rose by 11.2% over the period, the FTSE 250 Index (excluding Investment Companies) rose by 5.6% and the FTSE AIM All Share Index by 14.2%. The Company’s benchmark (the Numis Smaller Companies plus AIM (excluding Investment Companies) Index) rose by 9.5%.
The Board has declared an interim dividend of 8.00p per share (2015: 7.00p per share) representing an increase of 14.3% over the previous interim dividend.
The manager says that the underperformance relative to the benchmark was driven by a mix of stock selection and sector allocation. They did not own certain large benchmark stocks which have performed well. For example, not owning Mediclinic detracted 0.5% from relative performance (Mediclinic combined with Al Noor Hospitals forming a hospital group which is now a constituent of the FTSE 100 Index). The portfolio was also significantly underweight the mining sector which performed well during the period and detracted 1.4% from relative performance.
Unfortunately the statement did not include any more information about performance attribution. It looks as though this was a mistake however and the information should be included in the published report.
BRSC : BlackRock Smaller just fails to match benchmark