Investment Week is pleased to announce the finalists for the 23rd Investment Company of the Year Awards in association with the AIC, which have a proud history of rewarding excellence in closed-ended fund management.
Questor: this manager’s track record is stunning but his trust is trading at a 14pc discount
Questor investment trust bargain: shares in Strategic Equity Capital are cheap despite its strong record of investing in small UK firms
3 June 2021 • 5:00am
As the London stock market has recovered from its pandemic lows, the smallest listed companies have led the way.
While small company shares were hit hard by last year’s Covid crash, investors who clung on have been rewarded with a resurgence which has dramatically outpaced that of Britain’s big blue-chip stocks.
So it’s little surprise that among the best performing investment trusts of the past year are those that invest in these companies, or that their shares, once alluringly cheap, are now decidedly less so.
Given its broad exposure to all major asset classes, and its long-term track record, many investors use it as their one and only investment holding. The trust was launched 39 years ago.
Top performer River and Mercantile UK Micro Cap to return cash to shareholders
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Fifth redemption since IPO
Sabuhi Gard
The River and Mercantile UK Micro Cap investment trust will return cash to shareholders, following strong performance by the company over the past several months.
The trust s board intends to undertake a compulsory redemption of the trust s redeemable ordinary shares. Its redemption mechanism is used periodically to return capital to shareholders so as to return the company s net asset value (NAV) to around £100m, in accordance with the policy in the original prospectus.
The trust in the portfolio to see the most significant narrowing of its discount was Downing Strategic Micro-Cap, which traded on a 21.1% discount to NAV at the start of the year and now trades on an 11.2% discount.
The trust is still trading on the sixth-widest discount within the 24-strong IT UK Smaller Companies sector, according to data from the AIC. Between the start of the year and the beginning of April, it achieved a share price return and NAV return of 21.6% and 9.4% respectively.
Second on Kepler s list for its rapidly narrowing discount is River & Mercantile UK Micro-Cap, which resides in the same sector and is 14 out of 24 for the size of its discount.