Standard Life UK Smaller Companies: Long-term Positive Performance
Edison | Aug 07, 2017 04:52AM ET
Standard Life (LON:SL) Uk Smaller Co Trust (LON:SLS) has been managed by Harry Nimmo since 2003. He aims to generate long-term capital growth from a diversified portfolio of smaller-cap UK equites. While a little more cautious on the near-term outlook for small caps given, their strong start to the year and Brexit-related uncertainty, Nimmo remains very positive on the longer-term outlook. He suggests that the portfolio’s companies have potential earnings growth of 10-15% pa, which bodes well for SLS’s dividend growth. The trust has a very strong performance track record; it has outperformed its Numis Smaller Companies ex-Investment Companies Index benchmark over one, three, five and 10 years. Over the last 10 years, SLS’s dividend has compounded at an annual rate of 23.5%; its current yield is 1.5%.
Investment strategy: Six principles for investing
Nimmo has six principles for successful investing in small-cap equities: look for sustainable growth; go for quality; run your winners; concentrate your efforts; management longevity; and value is not everything. He uses Standard Life Investment’s proprietary stock selection Matrix to screen the investible universe, seeking high-quality companies with the potential to become the larger companies of tomorrow. Potential investee companies then undergo thorough fundamental analysis. As a result of the bottom-up stock selection process, SLS’s sector exposures may vary significantly from the benchmark. Gearing is permitted in a range of 5% cash to 25% debt as a percentage of net assets and is made up of convertible unsecured loan stock (CULS), which will expire in March 2018; at end-June 2017, net gearing was 2.5%.
To read the entire report Please click on the pdf File Below:
Standard Life UK Smaller Companies - Long-term Positive Performance
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.