Standard Life UK Smaller Companies Trust: Outperforming In A Weak Market
Edison | Jul 14, 2016 09:08AM ET
Standard Life (LON:SL) Uk Smaller Co Trust (LON:SLS) is an actively managed UK small- and mid-cap focused trust with a quality-biased portfolio. Manager Harry Nimmo has followed a consistent approach to stock selection since taking responsibility for the portfolio in 2003, seeking companies with resilient business models and the potential to deliver sustainable growth.
SLS’s NAV total return has been ahead of its benchmark over one, three and 10 years, with notably strong outperformance over the last 12 months against the background of a decline in the broader UK market. Recent market volatility has pushed the discount towards the recently introduced 8% target level for the share buyback policy.
Investment strategy: Selecting for quality
The manager employs Standard Life Investments’ proprietary stock selection matrix, which comprises a range of momentum-, change- and quality-related metrics, to filter the universe of about 800 smaller companies. The resulting list of c 120 candidate investments is subject to detailed analysis including company meetings, testing their potential for sustainable long-term growth in earnings and dividends.
Selecting from this list, the manager constructs a portfolio of 50-60 companies with above-benchmark returns on equity and forecast dividend growth, aiming to deliver long-term capital growth. Active share stands at c 90%.
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Standard Life UK Smaller Companies Trust - Outperforming In A Weak M
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