Comments on: BlackRock Smaller Companies: Losing Its Lustre?

By: ITinvestor

ITinvestor — Thu, 07 Dec 2023 13:17:05 +0000

In reply to Mark.

I still hold and have topped up my initial holding quite a few times although it is still one of my smaller positions overall and I have roughly the same amount in Henderson Smaller Companies (HSL). Not a lot seems to have changed about the way either trust is run as far as I can tell over the last few years but I’m happy with that as I don’t want to see frequent strategy shifts.

I would have preferred to see a bit more in the way of buybacks at both BRSC and HSL, especially when the discount reached the 15% level. A lot of trusts in the sector seem reluctant to do much unless their discounts are noticeably wider than others in the sector. BRSC has done a little in the way of repurchases but not much. T

If I was choosing some small-cap trusts today, I would probably mix them up a bit more as quite a few like HSL, BRSC, AUSC, MTU and so on have a fairly similar growth style and are more correlated than I initially appreciated. For example, I might have added a third trust from one of the concentrated/private equity style trio of Odyssean, Rockwood, and Strategic Equity Capital or perhaps one of the European small-cap trusts.

Hope that’s useful.

By: Mark

Mark — Thu, 07 Dec 2023 13:00:34 +0000

Great post. Thanks.

What’s your current thinking on BRSC, three years later?

By: ITinvestor

ITinvestor — Mon, 10 May 2021 10:58:24 +0000

Just to round this one off with the end result for year #18 to 28 Feb 2021:
https://investegate.co.uk/blackrock-smaller-companies-tr/prn/final-results/20210507161532P3375/

NAV return: +16.1%
Share price: +17.2%
Benchmark: +24.9%

All with income reinvested. So the record run has indeed come to an end although BRSC is still ahead over 3, 5, 10, and 15 years (which isn’t that surprising given the 17 annual beats on the trot!)

The annual dividend was raised by 2.5% to 33.3p despite revenue per share falling 64% to 13.6p. Revenue reserves remaining are about 1 years of dividends.

By: ITinvestor

ITinvestor — Thu, 03 Dec 2020 11:44:49 +0000

In reply to M. That's actually less their weighting in the main China index. In MSCI China, Alibaba is 20% and Tencent is 16%. I think all three China trusts have what looks like high weightings to these two companies but I think they are all actually underweight.

By: M

Wed, 02 Dec 2020 00:55:16 +0000

Seems like a risky portfolio, 12.28% in BABA and 10.41% in Tencent. Probably can just buy these 2 and do better without paying their fees. Would be much more impressive if they would have achieved this performance with smaller positions (4-5% of entire portfolio) over multiple stocks.

By: ITinvestor

ITinvestor — Tue, 01 Dec 2020 11:16:27 +0000

BGCG has now (well, 26 Nov) managed to get shareholder approval to issue more shares so I’m hoping this will bring its premium down to a more palatable level!

By: M

Tue, 01 Dec 2020 11:01:55 +0000

P.S. Totally agree with you that nobody knows if these funds will continue to do well, in fact I think they are overvalued and I hate buying at the historical top, but with Biden’s election “win” I see China profiting massively in the next few years\decades and feel like I need to have a position there to protect against US imminent decline.

By: M

Tue, 01 Dec 2020 10:22:32 +0000

Thanks ITInvestor, will read it now.

By: ITinvestor

ITinvestor — Sat, 28 Nov 2020 14:30:30 +0000

In reply to M.

Thanks M. I haven’t looked at Asia trusts for a while now, except for a piece I did on the 3 China specialists a few months ago: https://www.itinvestor.co.uk/2020/09/china-investment-trusts-come-of-age/

The Baillie Gifford and JPMorgan Asian and Japanese trusts all seem to have done very well recently but I have no idea whether they will continue to do so.