|Aberforth Smaller Companies Trust
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Aberforth Smaller Companies Share Discussion Threads
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|A vote "for" continuing as an investment trust or "against" to be wound up. Its at the AGM.|
|Thanks for the colour, topvest. Could you please explain what a 'continuation vote' is?|
|This is an excellent trust in my view. It's nothing like the two micro trusts mentioned in the last post. It's a small-mid cap value trust. Trades at a 20 per cent discount but has been good for a 13-14 per cent / annum return since inception. I prefer to invest in smaller companies than their benchmark in the main, but this company is an excellent way of winning in the small company space over time with an extremely disciplined approach.
Continuation vote is being voted on soon, but should get passed in my view. I'm also interested in adding to my holding in the geared income trust that should be rolled over into a new vehicle in the summer. The managers are not interested in growing AUM outside of their core area or even in it, just on achieving the good sort of returns historically delivered. Great investment over the long-term.|
|Have to say I think this has been an excellent investment trust and happy with my original 3000 shares + warrants bought in Nov 1990 for £3015 now worth £33000.(have many more since the initial investment) I can only thank Brewin Dolphin (Bell Lawrie Edinburgh in those days) for their good advice.I am sure there were even better investments around but I wasn`t told about them and with limited funds you can`t buy them all!|
|I rather suspect if you had reinvested dividends on both that would most certainly not be true.|
|This has performed much much better than SDV over time. Hold both, but without a shadow of a doubt this is much better in my view. SDV is an income stock at the expense of capital growth (certainly over a longer term horizon) whereas this delivers both over time - normally 14/15% per annum total return over a long time horizon. Not bad given Warren Buffet is on 20%.|
|Charges at .85% seem fair, dividend is poor though. Much prefer SDV, thks for thread though.|
|I thought that I would start a thread on this trust. I do think that this is a really good investment trust with a disciplined value driven approach. It's delivered a total return of 14% per annum over 25 years and is on a reasonable discount and dividend yield. Never seems to get much interest, but I think it's the best run small company investment trust in the UK. Anyone else have any views?|
|Does anyone know why ASL is dropping??|
|I wish I knew?|
|Why such a large drop here recently? Have I missed some startling news?|
|Aberforth as a manager are under-rated in my book. In 23 years they have turned £1 into £12 with a net asset value return per annum of 14.8%. There is also a good dividend record and a 2% yield. They just get on doing the business of buying lower valued shares in their index and selling when they appreciate to "fair value". I'm not sure that they deserve their discount rating as their record is very strong indeed. It's probably the wrong time to buy these, but I will add more at a suitable time.|
|Decided to unload a further 25% of my holding in this (narrowing discount) fund. A little bit of cash to face the future with - or reinvest if there's a significant dip.|
Henderson Smaller Companies (HSL.L, -15.0%, Buy)
Strong performance credentials
continue to be ignored on this trust with the disco
unt now double that found on
Smaller Cos (ASL.L, -7.2%, Sell)
. This comes despite HSL adding slightly more on a
basis over the last 6-12 months.|
|Bit annoyed about this share today. Seems like there was a major large spike down around lunchtime, quite out of character for ASL, that caught my stop out!
I will be looking for a nice entry at a bit lower price later on though.|
|NT, you just have to look at the FT Aim index, georgeous graph|
|I did wonder why it was so quiet on here|
|This has been steadily ticking up with not a single comment. E2V up another 5% today with this fund holding a big chunk, Barretts too (+7.8% today) as well as a lot of others in my watchlist!
Rank Company Weight
1 RPC Group 3.9%
2 e2v technologies 3.1%
3 JD Sports Fashion 2.8%
4 CSR 2.8%
5 RPS Group 2.7%
6 Bodycote 2.6%
7 Galliford Try 2.5%
8 Anite 2.3%
9 Mecom Group 2.3%
10 Collins Stewart Hawkpoint 2.2%
11 Phoenix IT Group 1.9%
12 Spirit Pub Company 1.9%
13 Low & Bonar 1.9%
14 AZ Electronic Materials 1.8%
15 Tullett Prebon 1.8%
16 Micro Focus International 1.8%
17 Regus 1.7%
18 Brewin Dolphin Holdings 1.7%
19 Optos 1.6%
20 National Express Group 1.5%
21 Morgan Crucible Co 1.5%
22 Beazley 1.5%
23 Yule Catto & Co 1.4%
24 Howden Joinery Group 1.4%
25 Huntsworth 1.4%
26 Greggs 1.4%
27 Barratt Developments 1.3%
28 St. Modwen Properties 1.3%
29 Vectura Group 1.3%
30 Debenhams 1.2%
31 Microgen 1.2%
32 Moneysupermarket.com Group 1.2%
33 Castings 1.2%
34 KCOM Group 1.2%
35 Halfords Group 1.2%
36 Lavendon Group 1.2%
37 Headlam Group 1.2%
38 UMECO 1.2%
39 Redrow 1.2%
40 GlobeOp Financial Services 1.1%
41 Northgate 1.1%
42 JKX Oil & Gas 1.1%
43 Hansard Global 1.1%
44 Unite Group 1.0%
45 Safestore Holdings 1.0%
46 Hansteen Holdings 1.0%
47 Laird 1.0%
48 Anglo Pacific Group 0.9%
49 Cranswick 0.9%
50 4imprint Group 0.9%
plus others and still a little way of NAV!
I bought in before it reached £6.00 with nice steady climb since. DYOR.|
|Article in the investors Chronicle 27.3.09 page 48 -Algy Hall:-
Up until the start of this year, one of the abiding rules of the bear market was "big is beautiful". Indeed, in every quarter since the market peaked in mid-2007 the blue-chip FTSE 100 index has outperformed both the FTSE Small Cap and FTSE Fledgling indices, and during most quarters the outperformance has been extreme. But this trend has gone into reverse so far in 2009 - and that offers some grounds for hope that we may be approaching the bottom.Heading for the exit
When markets fall there are good reasons for the flight from small caps. After all, their size makes them more vulnerable to the type of trading difficulties that all businesses face during a recession, such as cancelled orders and unhelpful bank managers. Small caps also tend to have a domestic focus which makes them very sensitive to problems in the UK economy, and they have not benefited from recent currency movements in the same way as the big-dollar-earning blue chips. Small-cap shares tend to be very illiquid, which makes prices more sensitive to any distressed selling. And they are riskier, and so are sold off whenever risk aversion rises.
That's why, since the market began to head south, the FTSE 100's 42 per cent loss has been considerably more palatable than the FTSE Small Cap's 58 per cent fall, the FTSE Fledgling's 55 per cent plunge and the FTSE AIM All Share's 67 per cent decline.
However, for a first time in this bear market, it looks like smaller companies are set to outperform blue chips over a quarter-year period. With the first three months of 2009 almost complete, the FTSE 100 has dropped 11.9 per cent while the FTSE Small Cap is down 7.1 per cent and the FTSE Fledgling is actually up 11.9 per cent. Long-suffering Aim is also in positive territory, having clawed a 1.4 per cent gain.
The positive momentum in smaller company shares could prove to be an important distinguishing feature in the market's latest rally compared with the many other bear market bounces we've experienced. That's because small caps are usually at the forefront of genuine market recoveries. The habit of small caps to outperform during a recovery is partly due their sensitivity to changes in economic conditions, which means they outperform in anticipation of better times to come. The other key factor, and perhaps the most relevant at the moment, is that small caps tend to be heavily oversold in the rush for the exit during a bear market, which creates some excellent value opportunities once the dust settles. So the recent fillip could be a sign that even if the recent rally proves to be just another false dawn, the market is at long last finding valuations with which it is comfortable.
A bright future
Fund manager Gervais Williams, who runs the Gartmore Growth Opportunties and Gartmore Fledgling investment trusts, believes that there could be something even more profound at work than a simple recognition that small caps are as he puts it "embarrassingly cheap". Mr William says, "I think there will be a big trend away from large caps to small caps over the next five years or so... driven by dividend distribution."
Mr Williams argues that large caps are over geared after many years of paying excessive dividends and will have to make unprecedented cuts he points to the futures market which suggests cuts in the region of 50 to 60 per cent. Meanwhile, profitable small caps with decent balance sheets are in a position to reduce their focus on reinvesting profits for growth and to start paying out more in dividends. This would make them one of the only options for those seeking large and growing yields.
Such a shift in sentiment towards small caps would be radical given the long-term movement in the other direction. Over the last 20 years the FTSE Small Cap index has actually fallen 1.2 per cent compared with an 88.1 per cent rise from the FTSE 100. But whether or not such a seismic shift
occurs, the recent outperformance by small caps is a reason for encouragement.
If you look at one of the best Investment Trust look at the chart for 2009.
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