Aberforth Smaller Companies Trust plc (LON:ASL) has announced its monthly factsheet for October 2024.
Monthly investment commentary: October
Globally, October was a risk‐off month. Equity markets and commodity prices were down, while bond yields and the dollar rose. US stocks out‐performed and within the UK large caps out‐performed smaller companies. The value style under‐performed against growth. This was a headwind to the Fund, which fell 4.4%, compared to the 2.7% decline for the benchmark DNSCI (XIC).
Performance detractors included Close Brothers, which fell after a legal appeal against the company was upheld in court. The case relates to commissions paid by lenders on motor finance arrangements and may increase potential compensation payable by Close and other lenders in relation to commission disclosures. Card Factory continued its poor share price run that began after the release of its interim results in September. The stockmarket appears to be questioning the company’s full year ambitions. Additionally, the Budget, with tax increases on employers and greater‐than‐expected‐increases to the minimum wage, has also damaged sentiment for retailers. Shares in NCC Group were weak. With no company specific news, this was likely the result of profit‐taking, after a strong run year‐ to‐date.
Among the positive contributors to performance was Galliford Try, as the market digested its full year results, a further share buy‐back announcement and management’s confident tone for continued progress. Despite a still difficult trading backdrop, Robert Walters’ share price rebounded following a reassuring mid‐month trading update. Others whose shares recovered in October included Enquest, which rose after a better‐than‐feared Budget for the oil and gas sector, and Videndum, which announced a change of CEO towards the end of the month.
Aberforth Smaller Companies Trust plc is an investment trust. It was launched, and received its listing, on 10 December 1990 and is one of the largest trusts within the UK Smaller Companies sector. The Trust’s objective is to achieve a net asset value total return (with dividends reinvested) greater than that of the Deutsche Numis Smaller Companies Index (Excluding Investment Companies) over the long term.
