Edison issues review on Scottish Oriental Smlr Co

RNS Number : 4468T

Scottish Oriental Smlr Co Tst PLC

03 July 2018

 

London, UK, 3 July 2018

Edison issues review on Scottish Oriental Smaller Companies (SST)

Scottish Oriental Smaller Companies Trust (SST) aims to generate long-term capital growth from investing in smaller Asia ex-Japan listed companies, typically with a market cap below US$1.5bn. The investment approach is bottom-up focused stock picking, unconstrained by benchmark considerations. Over the past 10 years, the trust has achieved an annualised NAV total return of 14.6% pa. Performance has been lower in more recent years, partly reflecting the relative underperformance of smaller companies versus large-cap companies, and quality versus momentum. The portfolio has been repositioned over the past two years and is now more concentrated and focused on higher-growth companies. A 14.8% discount to cum-income NAV has scope to narrow should small-cap Asian equities regain favour and the portfolio repositioning bears fruit.

SST currently trades at a 14.8% discount to cum-income NAV; wider than its three-year average of 12.5%. This partly reflects Asian small-cap equities being out of favour and the relative performance of the trust against the benchmark in more recent years. Over the past two years, the portfolio has gradually been repositioned in favour of higher-growth companies and there is scope for the discount to NAV to narrow should this exercise bear fruit, or if Asian small caps return to favour.

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