BMO Global Smaller Companies

Last updated 14 January 2020

BGSC is a long-term favourite in the smaller companies universe that has recently slipped to a discount…

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This is not substantive investment research or a research recommendation, as it does not constitute substantive research or analysis. With this commentary, Kepler Partners LLP does not intend to influence your investment firm's behaviour. 

BMO Global Smaller Companies

BMO Global Smaller Companies (BGSC) invests in a wide range of smaller companies across the globe, looking to take advantage of inefficiencies in pricing due to the lack of research coverage.

The portfolio is run by Peter Ewins, who focuses on identifying high-quality companies at attractive prices. Fundamental analysis is at the core of this process, with Peter placing a high level of importance on the company’s financial strength and management. The overall portfolio is made up of 178 companies (Source: Morningstar), and has a particular bias towards the smaller end of the spectrum.

Over the long term BGSC has achieved its objective of outperforming the benchmark MSCI ACWI by doing so in seven of the past ten years – often by considerable margins. 2019 saw the trust outperform the benchmark and peer group alike, delivering NAV total returns of 22.9%. In comparison, the iShares MSCI ACWI ETF delivered 21.8%, while the AIC Global Smaller Companies peer group delivered close to half the trust’s returns at 13.3%.

Alongside capital appreciation the trust also offers investors a small dividend. The trust has one of the strongest track records in the investment trust universe for dividend increases (48 years); however, it does yield just 1.1%.

Over the past five years, the trust has spent much of its time trading at a premium. However, despite the strong long-term performance and the strong performance in 2019, the trust has seen its premium slip and currently trades at a discount of 3.2%.

William Sobczak
William joined Kepler Partners in February 2018 as an investment trust analyst. Prior to joining, William graduated from the University of Western Australia, with a BSc in Psychology.

Related Research

Key facts

Investment objective

To secure a high total return by investing in smaller companies worldwide

As at:

09/01/20

Trust Name

BMO Global Smaller Companies

Ticker

BGSC

Management Company

BMO Asset Management Limited

Manager Name

Peter Ewins

Association of Investment Companies (AIC) Sector

Global Smaller Companies

12 Mo Yield

1.1%

Dividend Distribution Frequency

Semi-Annually

Latest Market Capitalisation

£892,621,341

Latest Net Gearing (Cum Fair)

33%

Latest Ongoing Charge Ex Perf Fee

0.79%

Turnover Ratio

30.3%

Shares Outstanding

607,225,402

(Discount)/Premium (Cum Fair)

-3.2%

Daily Closing Price

147p

Source: Morningstar

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