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UK stock selection positive for F&C Global Smaller Companies

UK stock selection positive for F&C Global Smaller Companies – The company has released its full audited statement of results for the year ending 30 April 2018.

The diluted NAV of  F&C Global Smaller Companies (FCS) delivered a total return of 9.3%. The share price of the company rose by 9.1% (total return). Both share price and NAV per share beat the company’s blended benchmark, which returned 7.9% on the same basis. The dividend increased by 17.6% over the year.

The benchmark of the fund is s a blend of the returns from two indices, the MSCI All Country World ex UK Small Cap Index and the Numis UK Smaller Companies Index in a 70/30% proportion.

UK stock selection positive for F&C Global Smaller Companies

Most of the out performance occurred during the first half of the year. The largest positive contributor to performance over the year was the strength of performance of the company’s UK portfolio. This delivered the best return despite the UK small cap market lagging most of the other global small cap indices with the manager identifying strong performers. The US portfolio also outperformed, although this was held back by the dollar, which lost 6.1% against sterling. In the other markets, the portfolio performance ended the year behind the relevant comparative small cap indices. 

The share price was at a 0.5% premium to the diluted NAV (0.8% 2017) and has occasionally dipped to a discount in recent months, in line with market movements.

Outlook – Anthony Townsend, chairman

“Current economic momentum is supportive for markets heading into the new year but as usual, there are many uncertainties looking forward at the macro level both on a global and more local level. Rising bond market yields as Central Bank support from markets is withdrawn is something that could undermine equities, as could further moves on the tariffs front. The lack of clarity surrounding the UK government’s negotiating position and objectives in relation to the future customs arrangements with the EU clearly remains a concern as we approach the formal exit in less than a year.

The Manager continues to meet companies across the industrial spectrum, seeking to maintain a portfolio of high quality and prudently financed smaller company stocks. While political risk remains elevated and at some stage a market setback is always possible, the Board remains optimistic for the medium term.”

 FCS : UK stock selection positive for F&C Global Smaller Companies

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