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The Company currently conducts its affairs so that securities issued by Dunedin Smaller Companies Investment Trust PLC can be recommended by financial advisers to ordinary retail investors in accordance with the FCA’s rules in relation to non-mainstream pooled investment products (NMPIs) and intends to continue to do so for the foreseeable future.
The Company’s securities are excluded from the FCA’s restrictions which apply to non-mainstream investment products because they are securities in an investment trust.
The Alternative Investment Fund Manager Directive (“AIFMD”) requires Aberdeen Fund Managers Limited, as the alternative investment fund manager of Dunedin Smaller Companies Investment Trust PLC, to make available to investors certain information prior to such investors’ investment in the Company.
The AIFMD is intended to offer increased protection to investors in investment products that do not fall under the existing European Union regime for regulation of investment products known as “UCITS”.
At close 29-Jul-2014Ord
|Net Dividend Yield||2.58%|
** 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.
In this webcast Ed Beal gives an update on a wide range of subjects including performance, a sector breakdown, the twenty largest investments and an outlook for the Trust.
Markets declined over the month, with the FTSE SmallCap ex Investment Companies Index falling by 1.3% on a total return basis. Economic news flow was quite good. In the US the labour market continued to improve and expectations are that the second quarter GDP reading will be materially more positive than the disappointing outcome in Q1. PMI readings suggest that China is back in expansionary territory and they have reaffirmed their target of 7.5% growth for the year. In the UK the recovery is ongoing; growth continues to lead the developed markets, unemployment is declining’ and full time jobs are increasing. The Financial Policy Committee, part of the Bank of England, has put pre-emptive measures in place to help manage house price inflation. These include an affordability test based on a potential increase in interest rates and a loan to income cap.
The performance from Europe has been less positive, though it is notable that many peripheral economies are now performing better than some of the core ones. That said the ECB is worried about the low levels of growth and the potential for deflation and have therefore cut interest rates to their lowest ever level, including negative deposit rates. They have also made it clear that they are prepared to countenance some form of quantitative easing to stimulate lending growth.
We introduced one new holding during the month. Abcam is a provider of research grade antibodies to universities and biotechnology companies. They are a global market leader in this field. We have followed the company for some years but the valuation has been higher than we could justify. A hiatus in healthcare spending in the US caused weakness in the share price. We viewed this as a chance to initiate a holding believing that the company has a sizable long term opportunity. Elsewhere in the portfolio we topped up the likes of Oxford Instruments and Wilmington, both of which had been weak. We funded this through top-slices of more strongly performing shares, these included Anite, Rathbone Brothers and The Restaurant Group.
The outlook is much as it has been since the start of the year. Equities are neither obviously cheap nor expensive. However, the gains over the past two or three years have been in large part a function of an expansion in valuation multiples. From a fundamental perspective it seems unlikely that this will continue indefinitely. Therefore a pickup in earnings growth should be a prerequisite of further progression. However, there are technical factors that could push markets higher as investors find themselves with little choice but to put money into equities.
The strength of sterling is constraining earnings growth for many businesses, although one positive is that it is also serving to limit the impact of inflation on costs. Interest rates are expected to increase in the foreseeable future, although Mark Carney has made it plain that in his view they will rise slowly and that the peak of this interest rate cycle will be below historic norms. Companies in general have strong balance sheets, which provide them with flexibility to increase capital expenditure or engage in M&A. Where they have needed additional capital we have been pleased to support holdings such as Acal who have had a fundraising to support further growth.
We remain of the view that investing in good quality companies with sound balance sheets will deliver attractive returns for investors with a long term horizon.
Source: Monthly Factsheet Aberdeen Asset Managers Limited