Introduction of AIM stocks benefits Montanaro UK Smaller Companies – the NAV per share of Montanaro UK Smaller Companies (MTU) increased by 7.3% during the year. The share price rose by 9.8% to 560p, reflecting a modest tightening of the discount over the year from 16.0% to 18.0% at 31st March 2018.
The company reported that the introduction of AIM stocks into the portfolio made a positive contribution to performance. At 31 March 2018, 27% of the portfolio was invested in AIM stocks. The Board decided to increase the limit of 30% to 40%. Board approval would be needed for amount of AIM stock in the portfolio was to rise above 35%.
Outlook – Roger Cuming, chairman
“Currently, there are more reasons for caution than usual: for example, rising inflation – combined with the limited ability of governments worldwide to continue with quantitative easing indefinitely – could lead to higher interest rates and bond yields, perhaps undermining equity valuations. There are fears over trade wars and concerns over the excessive debt levels of countries, corporates and individuals. In the UK, Brexit uncertainties and slowing GDP growth have led overseas investors to reduce UK weightings in portfolios to low levels. For the long-term investor, this might represent an opportunity as these are rebuilt over time.
As nobody can predict the future, the company’s strategy of investing for the longer term in high quality companies with strong balance sheets seems to be a sensible approach in an uncertain world.”
MTU : Introduction of AIM stocks benefits Montanaro UK Smaller Companies