International focus helps UK smaller companies shrug off domestic woes

An increase in its weighting towards UK smaller companies has helped F&C Global Smaller Companies, managed by Peter Ewins, to beat its benchmark in the six months to 31 October 2009.

The investment trust, which produced a net asset value total return of 18.9% and a share price gain of 20.7% over the period, was underweight the UK relative to its benchmark of 40% Hoare Govett UK Smaller Companies Index and 60% MSCI World ex UK Small Cap Index, which returned 18.8%. But its UK holdings achieved a return of 27.7% over the period compared with the index return of 23.6%.

With the UK arguably in worse economic shape than other major markets, the investment trust's Board said F&C Global Smaller Companies' focus on UK stocks with an international outlook had stood it in good stead.

Chairman Anthony Townsend said in the half-yearly results statement, released on 15 December: "The best contributor to performance in the UK was City of London Investment Group, an emerging market focused asset manager, which benefited from the recovery in overseas equities. Speciality chemicals company Elementissaw its share price more than double as global demand for its paint additive products showed signs of stabilisation, while McBride, which supplies own-label household and personal care products across Europe, produced good results as consumers switched to these cheaper products away from brands."

As at 31 October, the trust held 37.9% of its portfolio in the UK, with 36.8% in North America, 9.5% in Europe, 6.9% in Japan and 8.9% in the rest of the world, largely the Asia Pacific region.