Miton UK MicroCap Trust plc (LON:MINI) has announced its Factsheet for the month ended 31 March 2024.
Manager commentary
During March, a new trend may have started to develop, with the oil price steadily rising, and even some metal prices firming late in the month. It was also notable that the share prices of many of the largest companies also lost momentum during March.
The trust’s portfolio tends to invest in all areas of the micro-cap market, including some energy and commodity companies. Commodities are raw materials used to manufacture consumer products. We include holdings in these industry sectors for two reasons.
- The company share price fluctuations of those in the energy and mineral sectors tend to move
independently from other UK industry sectors. By including a range of energy and mineral holdings
it greatly improves portfolio diversification. - Furthermore, and perhaps even more importantly in our view, during geopolitical tensions when
many company share prices are often weak, the energy and material sectors can sometimes deliver
stronger returns than usual. On occasions, they can be a lot stronger, as energy and commodity prices spike upwards.
Interestingly, recovery in the energy and commodity sectors tends to favour the UK stock market, predominantly because it has such large weightings in these sectors. Indeed, when inflationary pressures
and recessions were frequent between 1965 and 1985 for example, the returns on these sectors may have been part of the explanation why the UK stock market outperformed the US stock market.
The trust’s portfolio still includes numerous holdings invested in micro-caps in many other industry sectors that are also standing on what we believe are overlooked valuations. As these start to recover, we
anticipate nothing short of a micro-cap supercycle from here.
Gervais Williams & Martin Turner
31.03.2024
Miton UK MicroCap Trust (LON:MINI) intends to invest primarily in the smallest companies, measured by their market capitalisation and quoted or traded on an exchange in the United Kingdom.
