stubbornly wide discount a buying opp

Henderson Smaller Companies has beaten its benchmark in eight out of nine years and is ranked top of 68 open- and closed-end UK small cap funds, making its stubbornly wide discount an opportunity, according to Canaccord Genuity.

stubbornly wide discount a buying opp


Since manager Neil Hermon took the helm of the investment trust in 2002 its annualised outperformance of the Numis SmallCap ex-investment trust index and Ftse All Share is 3.2% and 8.1% respectively.

“Historically the relative performance of Henderson Smallers has been correlated with the fortunes of its underlying universe. Notably, given the more difficult conditions (particularly during the first quarter of the financial year when the benchmark experienced an 18% peak-to-trough fall) the manager still managed to comfortably outperform the benchmark; the net asset value total return in the financial year was 5.1% versus -7.7%,” said Alan Brierley, researcher for Canaccord Genuity.

The £234m investment company currently has a discount of 22% which is at the higher end of its range over the past five years, although at the peak of the financial crisis in 2008 its discount rose as high as 40%.

Brierley added: “The portfolio consists of 107 investments and the manager is comfortable in taking significant positions relative to the index weighting. These investments will be made on a long-term basis with a holding period of over five years.”



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