Interim Management Statement

RNS Number : 3833B

F&C Global Smaller Companies PLC

14 August 2008

 



Date:         14 August 2008

Contact:    Peter Ewins    

                    F&C Management Limited    

                    020 7628 8000    

F&C Global Smaller Companies PLC

Interim Management Statement

for the quarter ended 31 July 2008

Objective

F&C Global Smaller Companies PLC invests in smaller companies worldwide in order to secure a high total return.

Summary of results

Attributable to equity shareholders	31 July 2008	30 April 2008	% Change
Share price	358.00p	385.00p	-7.0
Net asset value per share (debenture at nominal value)	403.15p	428.23p	-5.9
Net asset value per share (debenture at market value)	397.33p	421.05p	-5.6

Manager's Review

Equity markets were under pressure in the three months under review, with evidence that the slowdown in the US was spreading more widely around the globe. The strength in oil and some other commodity prices early in the period led to fears that inflation would rise significantly, reducing the potential for interest rate cuts in some parts of the world, notably the UK. 

Against the backdrop of weaker markets, the net asset value (NAV) per share on a total return basis (debenture at nominal value) fell by 5.1% over the period, but this compared favourably to a fall of 8.4% in the Benchmark (Hoare Govett UK Smaller Companies Index (40%) and the MSCI World ex UK Small Cap Index (60%)).

The outperformance against the Benchmark was due to positive stock selection. The portfolios in the UK, US, Europe and Asia were all ahead of the relevant local small cap indices, with Japan being the only market where the Company underperformed. The most significant individual contribution to the overall positive relative return came from the UK portfolio, where we benefited from strong rises in a number of our technology investments and were under-exposed to some of the weaker, more cyclical sectors of this market. 

In terms of asset allocation, the main change was to increase exposure to the US market, largely at the expense of reductions in the UK and Europe. This move proved beneficial, as the US was the best performer of the main markets in sterling terms, with investors becoming slightly more positive about the outlook for the economy following the monetary and fiscal policy initiatives by the US authorities. We remained overweight in Europe and Asia, marginally underweight in Japan, and moved more markedly underweight in the UK at the end of July. 

Effective gearing fell slightly over the three months from 3.3% to 3.1% at 31 July 2008.

The discount ended the period at 9.4% (based on NAV ex income with the debenture at market value), up from 7.7% at 30 April 2008. The Company has actively continued to buy back shares, and during the three month period 793,717 shares (1.8% of the share capital) were bought back and cancelled at a cost of £2,872,000. 

Ten largest equity holdings at 31 July 2008 

31 July 2008	30 April  2008	Company Country	% of total investments
1	1	Aveva Group United Kingdom	1.5
2	-	Axa Rosenberg Japan Small Cap Japan	1.5
3	-	iShares MSCI Japan Japan	1.4
4	3	Axa Rosenberg Pacific ex Japan Small Cap Asia Pacific ex Japan	1.4
5	2	Allianz GIS RCM Little Dragons Fund Asia Pacific ex Japan	1.3
6	54	Crawford & Company United States	1.2
7	17	Detica Group United Kingdom	1.2
8	5	Utilico Emerging Markets Asia Pacific ex Japan	1.1
9	8	SDL United Kingdom	1.1
10	15	Chloride Group United Kingdom	1.1

Geographical distribution of the investment portfolio at 31 July 2008

	31 July 2008 % of total investments	30 April 2008 % of total investments
North America	39.7	34.6
United Kingdom	34.8	36.9
Continental Europe	12.0	14.4
Japan	6.8	7.2
Rest of World	6.7	6.9

Further Information

Further information, including monthly factsheets and daily net asset values published since the end of the quarter, can be found on the www.fandcglobalsmallers.com website.

The Board is not aware of any significant events or transactions that have occurred between 31 July 2008 and the date of publication of this statement which would have a material impact on the financial position of the Company.  

By order of the Board

F&C Management Limited, Secretary

Exchange House, Primrose Street, London EC2A 2NY

14 August 2008

 

END

 

 

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