Will higher growth benefit European smaller companies?
Ollie Beckett, Portfolio Manager of the The European Smaller Companies Trust PLC (formerly TR European Growth Trust plc), provides an update on the Trust, highlighting the recent changes announced by the board, performance over the last financial year, inflation, and his approach to Environment Social and Governance (ESG) issues.
- The Trust’s board changed the Trust’s name to “The European Smaller Companies Trust PLC” in January 2022 and announced an 8:1 share split to improve the liquidity of the Company’s shares. It also reduced the management fee to make the Trust more accessible to retail investors.
- Over the past year, performance has been driven by solid stock selection, particularly within structural winners (Hellofresh) and recovery plays (eDreams).
- The Trust holds companies that are leading the transition to a greener and more sustainable economy and actively engages with these businesses to ensure that progress is being made towards their ESG goals.
Please read the following important information regarding funds related to this article.
- If a Company's portfolio is concentrated towards a particular country or geographical region, the investment carries greater risk than a portfolio that is diversified across more countries.
- Where the Company invests in assets that are denominated in currencies other than the base currency, the currency exchange rate movements may cause the value of investments to fall as well as rise.
- Most of the investments in this portfolio are in smaller companies shares. They may be more difficult to buy and sell, and their share prices may fluctuate more than those of larger companies.
- This Company is suitable to be used as one component of several within a diversified investment portfolio. Investors should consider carefully the proportion of their portfolio invested in this Company.
- Active management techniques that have worked well in normal market conditions could prove ineffective or negative for performance at other times.
- The Company could lose money if a counterparty with which it trades becomes unwilling or unable to meet its obligations to the Company.
- Shares can lose value rapidly, and typically involve higher risks than bonds or money market instruments. The value of your investment may fall as a result.
- The return on your investment is directly related to the prevailing market price of the Company's shares, which will trade at a varying discount (or premium) relative to the value of the underlying assets of the Company. As a result, losses (or gains) may be higher or lower than those of the Company's assets.
- The Company may use gearing (borrowing to invest) as part of its investment strategy. If the Company utilises its ability to gear, the profits and losses incurred by the Company can be greater than those of a Company that does not use gearing.
- Using derivatives exposes the Company to risks different from - and potentially greater than - the risks associated with investing directly in securities. It may therefore result in additional loss, which could be significantly greater than the cost of the derivative.
- If the Company seeks to minimise risks (such as exchange rate movements), the measures designed to do so may be ineffective, unavailable or negative for performance.