BlackRock Smaller Companies Trust plc (LON:BRSC) has announced its fund analysis by Kepler:
In our view, the continuity and consistency of BRSC’s investment process (see Portfolio) has been a significant contributor to the trust’s ability to deliver strong performance for investors over the long term, having generated an annualised total return of 9.1% over the past ten years. Over the past five years, BRSC has generated a NAV total return of 5.3%, outperforming the benchmark’s return of 1%, but underperforming the peer group average over the same period.
As we discuss in the Performance section, BlackRock Smaller Companies Trust’s recent underperformance has followed a prolonged period of outperformance and comes at a time of elevated volatility. In our analysis, BRSC’s relatively high performance and consistency scores show that investors have been generally rewarded for taking on the additional risk of the strategy. Roland’s focus on identifying high-quality businesses, together with his patience to remain invested over the long term, has translated into positive alpha relative to the benchmark and peers.
BRSC has a current yield of 3.1%, which is the second-highest in the sector. BRSC has significant revenue reserves, which the board can use in support of the dividend, thus providing a degree of reassurance. At the time of writing, BRSC trades at a 13.3% discount to NAV, which is slightly narrower than the AIC UK Smaller Companies sector average of 14.5%, according to JPMorgan Cazenove, as at 23/05/2023. As the second-largest trust in the AIC UK Smaller Companies sector, BRSC benefits from good liquidity in its shares. In light of this, the rigorous and consistent investment process and strong long-term track record, not to mention the trust’s low charges, we believe that the current discount level may present an attractive entry opportunity for longer-term investors.
To learn more about the BlackRock Smaller Companies Trust plc please follow this link: blackrock.com/uk/brsc
