Montanaro UK Smaller Cos Investment Trust PLC on Monday said it sights an opportunity going forward after reporting returns below its benchmark in financial 2024.
The London-based trust, which is managed by Montanaro Asset Management Ltd, invests in profitable companies with smaller market capitalisations.
In the year ended March 31, net asset value rose 3.9% to 118.9 pence per share from 114.5p the year prior.
Net asset value increased 8.3% during the year, underperforming the benchmark Deutsche Numis Smaller Companies Index which returned 9.0%.
The total dividend paid to shareholders grew 2.2% to 4.60p per share from 4.50p.
MUSCIT noted the challenges facing UK listed equities, highlighting reduced liquidity and the declining number of listed companies on both the AIM and main market.
Chair Arthur Copple said: ‘Today’s challenging environment presents a compelling opportunity for long-term investors to capitalise on favourable valuations for UK smaller companies. The board was pleased to see Montanaro Asset Management recently take advantage of this opportunity to increase its own stake in the company.’
Montanaro Asset Management recently increased its investment in MUSCIT to over 6%.
Under the assumption that no new black swan events and geopolitical crises occur, the investment manager believes the market may be entering a more ‘normal’ period for smaller companies if inflation and interest rates continue to fall.
MUSCIT shares were up 1.9% to 107.99 pence each in London on Monday afternoon.
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