Interim Management Statement
Date: 22 February 2011
Contact: Peter Ewins
F&C Management Limited
020 7628 8000
F&C Global Smaller Companies PLC
Interim Management Statement
for the quarter ended 31 January 2011
Objective
F&C Global Smaller Companies PLC invests in smaller companies worldwide in order to secure a high total return.
Summary of results
Capital return
|
Attributable to equity shareholders |
31 January 2011 |
31 October 2010 |
% Change |
|
|
|
|
|
|
Share price |
567.00p |
493.00p |
+15.0 |
|
|
|
|
|
|
Net asset value per share (debenture at nominal value) |
576.79p |
521.65p |
+10.6 |
|
|
|
|
|
|
Net asset value per share (debenture at market value) |
569.61p |
513.35p |
+11.0 |
|
|
|
|
|
Manager's review
Equity markets did well in the three months under review. Economic data tended to be supportive for equities in terms of the growth outlook, with the US economy appearing to pick up momentum again, although the UK and some other European economies were hampered by severe winter weather at the end of 2010.
Smaller company shares performed strongly in the quarter, continuing the trend from earlier in 2010. The Company's Benchmark, which is a blended index of the returns of 30% Hoare Govett UK Smaller Companies (excluding investment companies) Index and 70% MSCI All Country World ex UK Small Cap Index, recorded a total return in sterling terms of 9.1% in the three months. The Company's net asset value ("NAV") per share total return of 10.9% was ahead of this and encouragingly the share price rose by 15.0%. Taking the debenture at market value and excluding current period income, the discount ended the period at 0.1%, compared to 3.5% at the end of October 2010. For the nine months ended 31 January 2011, the NAV has returned 12.5% on a total return basis against a rise of 10.8% for the Benchmark, with the share price up by 23.0% as the discount has narrowed significantly.
Pleasingly all the regional portfolios beat their local small cap indices over the quarter. With markets rising, we saw a number of good movements in terms of individual stocks and the funds we use to gain exposure to Japan and the Rest of the World also did well.
The best returns over the period came from the Japanese portfolio, following a period of lacklustre performance earlier in 2010. The US portfolio performance was good in the period as fears of a slowdown in the US economy dissipated. Asian and other emerging markets underperformed over the period after running up strongly earlier in 2010.
On an asset allocation basis, there were no major changes to the structure, though we did add to the US portfolio early in the period and took cash out of the UK.
Equity markets will remain sensitive to news on economic growth and there are on-going concerns surrounding the European sovereign debt situation. Rising inflation stemming from continuing strength in commodity prices is also becoming more of an issue, reflected in higher interest rates in parts of Asia and the developing world. For now though, on the basis that the world economy is likely to remain in a solid growth mode, the Company is still in a geared position, albeit the level of gearing at 2.2% is a little lower than the 3.8% level of the end of October 2010.
The portfolio obtains exposure to Japanese and Asian markets via a number of collective funds as opposed to individual holdings. F&C is responsible for selecting the appropriate funds to use for these markets.
Ten largest holdings (excluding collective funds) at 31 January 2011
|
31 January 2011 |
Company Country |
% of total investments |
|
1 |
Willbros Group United States |
1.0 |
|
2 |
Harsco United States |
1.0 |
|
3 |
Global Industries United States |
0.9 |
|
4 |
Foster Wheeler United States |
0.9 |
|
5 |
Amedisys United States |
0.9 |
|
6 |
Quanta Services United States |
0.9 |
|
7 |
Career Education United States |
0.9 |
|
8 |
CapitalSource United States |
0.9 |
|
9 |
DeVry United States |
0.9 |
|
10 |
Senior United Kingdom |
0.8 |
Ten largest holdings at 31 January 2011
|
31 January 2011 |
Company Country |
% of total investments |
|
1 |
iShares MSCI Japanese Small Cap Exchange Traded Fund Japan |
3.7 |
|
2 |
Utilico Emerging Markets Asia Pacific ex Japan |
2.3 |
|
3 |
Aberdeen Global-Asian Smaller Companies Fund Asia Pacific ex Japan |
2.1 |
|
4 |
Allianz GIS RCM Little Dragons Fund Asia Pacific ex Japan |
2.1 |
|
5 |
The Scottish Oriental Smaller Companies Trust Asia Pacific ex Japan |
2.1 |
|
6 |
Axa Framlington Japan Smaller Companies Fund Japan |
1.6 |
|
7 |
Australian New Horizons Fund Australia |
1.3 |
|
8 |
Willbros Group United States |
1.0 |
|
9 |
Harsco United States |
1.0 |
|
10 |
Global Industries United States |
0.9 |
Geographical distribution of the investment portfolio at 31 January 2011
|
|
31 January 2011 % of total investments |
31 October 2010 % of total investments |
|
North America |
41.3 |
40.8 |
|
United Kingdom |
32.5 |
33.7 |
|
Continental Europe |
10.0 |
9.8 |
|
Japan |
5.4 |
5.0 |
|
Rest of World |
10.8 |
10.7 |
Further information
Further information, including monthly factsheets and NAVs 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 January 2011 and the date of publication of this statement which would have a material impact on the financial position of the Company.
This interim management statement has been prepared solely to provide information to meet the requirements of the UK Listing Authority's Disclosure and Transparency Rules.
By order of the Board
F&C Management Limited, Secretary
Exchange House, Primrose Street, London EC2A 2NY
22 February 2011
This information is provided by RNS