Edison review on abrdn UK Smaller Cos Growth Trust

RNS Number : 1635E

abrdn UK Smaller Cos. Growth Trust

26 October 2022

 

London, UK, 26 October 2022

Edison issues review on abrdn UK Smaller Companies Growth Trust (AUSC)

abrdn UK Smaller Companies Growth Trust (AUSC) is managed by Harry Nimmo (since September 2003), who has announced his retirement at the end of 2022, and Abby Glennie (since November 2020). Glennie will become lead manager supported by existing team member Amanda Yeaman. There will be no change to the successful long-term process where stocks are screened using the proprietary Matrix, seeking companies that fulfil the managers' strict quality, growth and momentum criteria. AUSC has experienced a period of relative underperformance in recent months as investors have favoured cyclical and value stocks rather than growth businesses. However, the managers are confident that, during a recession and beyond, AUSC's shareholders will benefit from the quality attributes of the trust's investee companies.

In an environment of heightened risk aversion, AUSC is trading at a 13.3% discount to cum-income NAV, which is meaningfully wider than the 10.1%, 7.3%, 6.7% and 5.6% average discounts over the last one, three, five and 10 years respectively. This provides plenty of scope for a higher valuation if the trust can build on its long-term record of outperformance. The board actively repurchases AUSC's shares seeking a maximum 8% discount in normal market conditions.

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