London, UK, 8 März 2024

Edison issues update on abrdn UK Smaller Companies Growth Trust (AUSC): Relative performance getting back on track

abrdn UK Smaller Companies Growth Trust’s (AUSC’s) managers, Abby Glennie and Amanda Yeaman, are looking forward to further improvement in the trust’s relative performance, as investors’ focus is now more on company fundamentals rather than macroeconomic developments. The managers are continuing to use the Matrix, a proprietary screening tool, to search for companies exhibiting high-quality, growth and positive momentum features. Despite a difficult period of performance during 2022, when rising interest rates led to a derating of growth stocks, the strategy employed by abrdn’s small-cap team has proved very successful over the last 25+ years across multiple business cycles.

The managers say that there is a wealth of opportunities available in their investible universe, meaning there is healthy competition for capital within the portfolio. Many portfolio names have positive earnings estimates revisions, which suggests a robust operating environment; this is confirmed in meetings with companies. While AUSC aims to generate capital growth there has been solid progression in its annual dividend, supported by a diverse income stream. Over the last five years, the trust’s annual distributions have compounded at 9.5% per year, despite lower income during COVID. This has been helped by some portfolio companies paying special as well as regular dividends. 

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