BlackRock Smaller Companies (BRSC) aims to grow capital over the long term by investing in a portfolio of UK listed smaller companies. The trust has an exceptional long-term track record relative to the benchmark, outperforming in each of the past ten calendar years, as we discuss further in the Performance section.
The manager, Roland Arnold, pays particular attention to growth companies which have the potential to become market leaders in their fields. As such, he favours companies towards the smaller end of the market cap spectrum. The portfolio is one of the most diversified in the UK Smaller Companies sector, with close to 130 stocks. The holdings come from a wide range of industries with diversified sources of revenue, and many of them have an international element to their revenues.
Over the past five years the trust has delivered NAV total returns of 42.7%, compared to 7.1% from the benchmark, and 28.1% and 23.8% respectively from the IA and AIC peer groups. Although the trust has been unable to generate positive returns in 2020, it has held up well in comparison to the rest of the sector. This has principally been due to the high quality, growth focus of the underlying companies, as well as the well diversified approach to risk employed by Roland.
Although capital growth is the main focus, the trust also has a strong history of dividend growth. Currently yielding 2.5%, BRSC has grown its dividend at a rate of 21.1% over the past five years.
Currently (as at 07/05/20) the trust is trading at a discount of 1%.