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Small-caps top as investment trusts lead market rebound

12 February 2018

Investment trust share prices in the ascendant as markets rally from last week’s falls. Bargain hunters move in on F&C Global Smaller Companies’ wider discount.

Investment trusts are participating in today’s market rebound although there appears to be no prospect of a let-up in the recent surge in volatility that has caused geared funds to swing wildly.

Scottish Mortgage Trust (SMT), the only closed-end fund in the FTSE 100, regained 2.2% to 437.6p after a turbulent week for shares in the £6.2 billion company.

It was joined by global rivals Bankers (BNKR), up 2.5% to 850p; Scottish (SCIN), up 2.4% at 817p; and stable mate Monks (MNKS), up 2.3% at 759p. Foreign & Colonial (FRCL) followed behind with a 1.9% rise to 638p.

Martin Currie Global Portfolio (MNP) recovered best among this peer group with a 3.5% advance to 236p.

Bruce Stout’s global income fund, Murray International (MYI), was among the leaders, up 2.7% at £11.98.

FCS discount widens

Within the FTSE 250, a buying opportunity opened in F&C Global Smaller Companies (FCS) on Friday as its shares closed 4.4% below net asset value (NAV), a wider discount than the 12-month average of 0.7%, to give it a ‘cheap’ Z-score of -6.9, according to the latest Numis Securities data released today.

As regular readers of our Investment Trust Watch column will know a Z-score of -2 or below indicates a trust or investment company share price is trading significantly below its normal range.

Bargain hunters seized their opportunity and the shares gained 2.4% at £13.05 today.

Relief rally

This formed part of a broader rally with many smaller company trusts making headway in the FTSE Small Cap index after falls of up to 7% last week.

Dunedin Smaller Companies (DNDL) led the way, up +4.8% at 272p, followed by Invesco Perpetual UK Smaller (IPU), up 3.3% at 494p; Montanaro European Smaller (MTE), up 3.1% at 820p; Edinburgh Worldwide (EWI), up 3% at 726p; and in Japan Baillie Gifford Shin Nippon (BGS), adding 2.9% to 912p.

UK equity income funds also enjoyed the rally with JPMorgan Claverhouse (JCH) up 2.9% at 702p; Alastair Mundy’s Temple Bar (TMPL) up 2.3% at £12.58; and Mark Barnett’s Perpetual Income & Growth (PLI) 2% better at 354.5p.

There was some relief for Woodford Patient Capital Trust (WPCT) up 1.9% from last week’s low at 78.5p.

JPMorgan American (JAM) reaped the benefit of Wall Street’s late rally on Friday, gaining 2% to 387.5p. US dominated portfolios such as Worldwide Healthcare (WWH) also did well rising 2.8% at £23.95.

Emerging markets were in favour with JPMorgan China (JMC) racing 4.6% higher to 310p and JPMorgan Global Emerging Markets Income (JEMI) up 2.5% at 863p. Vietnam Enterprise (VEIL) gained 2.2% at 468p, Invesco Asia (IAT) and JPMorgan Indian (JMI) both jumped 3.2% to 289p and £11.25 respectively.

Having led the sell-off, tech shares were prominent in the rebound with Allianz Technology Trust (ATT) recouping 4% to £11.65.


Investment company news brought to you by Citywire Financial Publishers Limited.


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