The Trust seeks to exploit the high investment potential of smaller companies listed on global equity markets. Many smaller companies are not widely researched, opening up the potential for our detailed fundamental analysis to identify valuation anomalies. The greater inherent ability of smaller enterprises to grow faster than more mature, larger companies, is also positive for the long term outlook.

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Key points

This trust remains the only investment trust to offer investor access to a broadly spread global smaller companies portfolio. The portfolio consists of individual smaller company investments within the US, UK and European markets, and fund holdings targeting smaller companies in Japan, Asia, Latin America and other smaller territories The dividend of the Company has risen for 42 years in a row, benefiting from a growing income stream from the investment portfolio.

Past performance is not a guide to future performance.

Fund facts
Investment manager F&C Management Limited
Benchmark 30% Numis UK Smaller Companies (excluding investment companies) Index / 70% MSCI all country World ex UK Small Cap Index
AIC sector Global Growth
Launch date 1889
Total assets £448.5 million (as at 31.05.14)
Currency Sterling
ISIN GB0000175058
SEDOL 17505
Key dates
Annual general meeting Thursday 24 July 2014 Chartered Accountants Hall
Year end 30 April
Dividend payment date(s) August and January
Ex-dividend date(s) July and December
Announcement dates Half year results: Monday 15 December 2014
Final results: Monday 16 June 2014

Fund manager commentary

Share prices initially fell at the start of May, following on from the weakness in April, but later on they rallied as sentiment recovered. Japanese small caps performed well this month, having lagged other parts of the world in the early part of 2014. The NAV rose, but was a little behind the Benchmark for the month.

In the US, we were behind the Russell 2000 as technology and healthcare stocks, sectors in which we are light, staged something of a revival. At the stock level, there were several weak performers, notably electronics stock Mercury Systems where takeover discussions appear to have come to nought, Bottomline Techologies, where organic growth has slowed, and Safeguard Scientifics, which saw downgrades. More positively Pernix Therapeutics jumped after it announced an acquisition from Glaxo and Spectrum Pharmaceuticals announced positive results.

In the UK we were helped by a rise in Salamander Energy’s shares as the company confirmed a number of bid approaches and recent purchase Halfords was also up on the back of a positive trading statement. Other strong performers included Digital Barriers as it announced some good new contract wins and industrial products distributor Trifast, which made a very earnings enhancing acquisition in Italy. On the downside, Supergroup announced relatively weak recent sales trends and Safestore ran into profit taking as investors lost their appetite for housing market related stocks.

In Europe, we were a little behind for the month as a whole, with a couple of our Irish holdings, Aer Lingus and Irish Continental Group falling back, the former mainly as a result of a dispute with its union. On the funds side, the Japanese holdings outperformed the rise in the local market and we also saw most of the Asian facing funds move up in May.

As at 31 May 2014

The value of shares and the income from them is not guaranteed and can fall as well as rise due to stock market movements. Past performance is not a guide to future performance. When you sell your shares, you might get back less than you originally invested. If markets fall, gearing can magnify the negative impact on performance. Changes in rates of exchange may have an adverse effect on the value, price or income of investments. Emerging Markets, Unquoted Companies and Smaller companies carry a higher degree of risk and their value can be more sensitive to market movement; their shares may be less liquid and performance may be more volatile. The fund may invest in hedge funds or private equity funds which are not normally available to individual investors, exposing the fund to the performance, liquidity and valuation issues of these funds. Such funds typically have high minimum investment levels and may restrict or suspend redemptions or repayment to investors. The asset value of these shares and its prospects may be more difficult to assess.

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