F&C US Smaller Companies Trust trounces benchmark

F&C US Smaller Companies Trust has comprehensively beaten its benchmark in the year to 30 June 2009.

Over the period, sterling-adjusted net asset value total return per share for the £60.6m investment trust was 8.7%, compared with a sterling-adjusted return of -10.9% for the Russell 2000 index of smaller US companies.

The year in review has been a volatile one, with the Russell 2000 halving in value in the two months or so following the collapse of Lehman Brothers, before mounting a recovery from March onwards. The stockpicking small and mid-cap trust, managed by Robert Siddles at F&C, has a disciplined investment approach that its chairman, Gordon Grender, said had paid off during the year.

Grender added: "The US, in common with other developed economies, faces many obstacles before it returns to the path of sustainable growth; however, given the vitality of its people, its wealth of resources and well-developed manufacturing sector it is likely to recover first and stands to benefit from expansion in Asia. The enormous growth of government borrowing suggests that inflationary risks are probably higher than they have been for a generation. It is worth recalling that in the 1970s, the last time inflation became a serious problem, smaller companies experienced one of their strongest periods of performance."