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At close 09-Dec-2013Ord
|Net Dividend Yield||2.37%|
** Debt at par
Source: Morningstar, NAV = Net Asset Value, excluding income.
The value of investments and the income from them may go down as well as up and investors may get back less than the amount invested. The tax benefits relating to ISA investments may not be maintained. Please refer to the Key Facts documents contained in the ISA/Share Plan Brochure & Application form for general and specific investment risks attaching to the individual trusts.Read the detailed Risk Warning
Past performance is not a guide to future results.
See latest monthly factsheet below for performance history.
40 Princes Street,
Registered in Scotland as an Investment Company Number 14692
The objective of Dunedin Smaller Companies Investment Trust PLC is to achieve long term growth from a portfolio of smaller companies in the United Kingdom.
Markets continued their upward path during October with smaller companies delivering a total return of 3.6%. The month was characterised by a rising appetite for risk. This arose as investors focussed on the signs of recovery emanating from many developed economies allied with a perception that macroeconomic risks, specifically those associated with the European debt crisis were receding. The news flow from the domestic economy was broadly positive. Third quarter GDP was in line with expectations at 1.5%. The IMF’s forecast for 2014 was raised, in part aided by a pick-up in the housing market as the “Help to Buy” scheme began. Construction output was again strong coming in at 4%. In Europe there were further positive signs as Spain delivered her first quarter of positive growth for more than two years and Greek bond yields hit post crisis lows.
In the US a temporary agreement was reached that allowed an end to the self-enforced shutdown of large parts of the public sector. The employment data was again weak with non-farm payrolls some way below expectations. This led to an assumption that tapering would now be delayed till at least 2014 and markets responded positively. Emerging markets remained a source of concern despite China delivering 7.8% growth, and the IMF cut their expectations for global growth for this year and next.
In the portfolio we took advantage of share price weakness and bought more shares in Anite, Oxford Instruments and Devro. These purchases were funded with top-slices of holdings that had done well, especially where share price moves had resulted in less attractive yields. These included BBA Aviation, Robert Walters, TT Electronics and Weir.
Equity markets keep rising. We have commented in the past that there are issues surrounding developed market indebtedness, the already high levels of companies’ profit margins and the unusual situation whereby in the US bad economic news is regarded as good news for the equities. These factors create the potential for volatility even as we consider the prospect that a more broadly spread recovery may be underway.
However, recent weeks have seen a shift in corporate performance. Profit warnings have accelerated. They are no longer limited to what might be considered lower quality businesses. Currency movements are playing a part but growth as a whole has become more difficult to achieve. Business across a diverse array of industries including; software, aerospace suppliers, pump manufacturers, food producers and lift manufacturers have all issued disappointing trading statements. Therefore the progression of markets has resulted from expansion of valuations rather than profits. In the event that difficult trading conditions continue, such a dynamic would be expected to reverse eventually introducing a further source of potential volatility. The companies in the portfolio will not be immune from these difficulties. But we believe that given the options their strong balance sheets provide and the inherent strength of their business models they can prosper over the longer term.
Source: Monthly Factsheet Aberdeen Asset Managers Limited