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The Company currently conducts its affairs so that securities issued by Aberdeen Smaller Companies High Income 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 Aberdeen Smaller Companies High Income 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”.
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.
At close 23-Oct-2014Ord
|Net Dividend Yield||3.43%|
Source: Morningstar, NAV = Net Asset Value, excluding income.
40 Princes Street,
Registered in Scotland as an Investment Company Number 137448
The objective of the Company is to provide a high and growing dividend and capital growth from an investment in a portfolio invested principally in the ordinary shares of smaller UK companies and UK fixed income securities.
In this webcast Phil Webster gives an update on a wide range of subjects including performance, a sector breakdown, the twenty largest investments and an outlook for the Trust.
September was a weak month across the UK equity market cap spectrum. The FTSE SmallCap (ex Investment Companies) index declined 2.6% on a total return basis with the Trust declining 2%. The general trend across the Trust has been equity weakness supported by stronger fixed income and preference share portfolios which continued through September. This is exactly the performance that we would expect to see with the blue chip utility focus of the fixed income portfolio protecting the downside through more volatile periods.
The UK economy continues to deliver robust growth but with that the expectation of an interest rate rise is moving ever closer. The Monetary Policy Committee meeting saw two members vote for an increase and Aberdeen’s expectations are that we will see a rate rise around the first quarter of 2015. Europe, however, is experiencing much slower growth and with inflation declining again to 0.3% the ECB Governor Mario Draghi has announced the purchase of Asset Backed Securities and Covered Bonds. This is expected to give the eurozone much needed stimulus with the desire to get banks to lend and businesses to invest.
Equity markets have been volatile of late with profit warnings being announced on a daily basis. These announcements haven’t been sector specific and this isn’t wholly unexpected given the growth expectations coupled with the slowdown in both the eurozone and emerging markets. Share price reactions to these profit warnings have been most pronounced where companies were priced for growth hence our focus on reducing positions where we have seen extended valuations. With this in mind we reduced housebuilder Bellway and James Fisher and Sons due to full valuations. We also took some profits in Berendsen despite the core business continuing to deliver stable revenue growth we felt that this was in part being reflected in the valuation. We utilised this cash to add to property developer Hansteen and Isle of Man telecom incumbent Manx Telecom where we see better value and both are yielding above 5%.
The current backdrop is therefore volatile with geopolitical tensions escalating in a number of regions. That said the Trust is holding up well over the shorter term and over the year we remain in positive territory despite the headwinds we are facing. Looking out to the year-end we will continue to focus on valuations and balance sheet quality and with that in mind we are seeing a number of highly valued businesses beginning to look more attractive. We therefore remain positive on smaller companies as a whole and see a number of attractive opportunities over the medium term to add value.