25 Oct 2019 11:31
London, UK, 25 October 2019
Edison issues review on Standard Life UK Smaller Companies (SLS)
Standard Life UK Smaller Companies (SLS) has a long-term record of significant outperformance versus its benchmark. Manager Harry Nimmo says that his disciplined investment process, which focuses on quality, growth and momentum, also provides an element of resilience in periods of market weakness. He is encouraged by the trust's growing level of income, which is allowing SLS to employ a progressive dividend policy, and argues that over the long term, investors have been well served by an allocation to smaller UK companies as they have outperformed the broader UK market. The trust's board actively employs a discount control mechanism, and has recently been repurchasing shares as SLS's discount has bumped up against its 8% target maximum.
The board actively manages SLS's discount, aiming for a maximum 8% in normal market conditions; the primary method is via share repurchases. The trust's shares are currently trading at a 5.7% discount to cum-income NAV, which compares with the 5.0% to 7.6% range of average discounts over the last one, three, five and 10 years. SLS has a long-term history of dividend growth, compounding at an annual rate of 17.0% over the last decade; it currently yields 1.5%.
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