Strategic Eqty Share Price (SEC)

Don't forget to tender your shares in this if you want to get out at anywhere near NAV. Discount will surely widen again to around 10% (like most other small cap trusts) once the tender is complete!

In summary a basket case.

with SEC - still going strong

Peer group comparison The 11 UK smaller cap investment companies that make up the peer group below encompass a range of divergent investment styles and SEC’s investment approach is unique within the peer group. SEC ranks tenth of 11 funds over one year. The principal reason for this may be SEC’s weighting to ‘smaller small caps’ and AIM companies, which, as we noted on page 7, underperformed FTSE small cap ex-IC stocks in 2012. SEC’s analysis of performance in Q412 highlights falling share prices for KCOM (disappointing results), Lavendon (which SEC believes may be shorted by hedge funds) and Tyman (on profit taking); these three stocks reduced the NAV by 2% over that period. SEC is sixth of 11 funds over three years and tenth of 11 over five years in terms of total shareholder return. SEC’s ongoing charges are the second-highest of the peer group and its discount is the second-widest. It is among the lowest-yielding UK smaller company funds.

Dividend policy and record The directors expect shareholder returns will derive primarily from capital appreciation and intend only to declare final dividends to the extent necessary to maintain SEC’s investment trust status (not retaining more than 15% of income). SEC did not declare a dividend in two of the seven accounting periods since launch. The dividend for the period ended 30 June 2012 was substantially higher than for the previous year and the highest paid since launch, but this should not be taken as any indication of likely future dividend payments.