BMO Global Smaller Cos Outperforms Benchmark In First Half

(Alliance News) - BMO Global Smaller Cos PLC said Friday it outperformed its benchmark in the first half of its financial year due to strong stock selection in North America.

The smaller-company investor said for the six month ended October 31 net asset value total return was 2.2%. Its benchmark - comprising 30% the Numis UK Smaller Companies excluding the investment companies Index and 70% the MSCI All Country World excluding the UK Small Cap Index - had a return of 0.5%.

"Our outperformance was mainly due to strong stock selection in North America, where a defensive skew to the portfolio proved to be astute, with geographic asset allocation also making a positive contribution," the company said.

Net asset value per share, as at October 31, was 142.65 pence, compared to 141.67 pence at April 30 and 136.50 pence a year ago.

The company declared an interim dividend of 0.55 pence, a 10% increase.

The company said the North American portfolio had been well-positioned for the market environment though the UK portfolio had a difficult six months, delivering a negative 3.4% return, with a more than usual number of stock-specific issues impacting upon performance, the company said.

"The environment of lower interest rates was supportive for the performance of certain rate sensitive sectors on global markets such as REITs and Utilities," BMO Global said.

Companies more exposed to cyclical markets, or those being impacted by the trade war within the industrials and energy sectors for example, tended to lag, the company noted.

"We expect near-term trading conditions to remain quite difficult for some of our companies, but low interest rates should continue to be supportive to equity market performance," the company said.

BMO Global shares were up 1.3% in London at 143.10 pence each on Friday.

By Loreta Juodagalvyte; loretajuodagalvyte@alliancenews.com

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