Framlington has broadened the investment universe for its 1,000 Smallest Companies investment trust....
Framlington has broadened the investment universe for its 1,000 Smallest Companies investment trust. Last week the trust updated its investment remit to permit it to invest in stocks listed on the Easdaq. Since the inception of the trust in 1992, a number of new markets have been created and the trust started to invest in the AIM market in 1997.
The investment objective has also been revised to reflect the kind of companies which the portfolio has invested in for the past 18 months. According to Brian Watson, manager of the trust, these companies will generally display an innovative approach to business, demonstrating a willingness and ability to embrace new and evolving technologies and take advantage of social, political and cultural trends in the economy. The market capitalisation of all the companies in the portfolio at the time of purchase, in most cases, will be less than that of the median company in the FTSE SmallCap.
As a result of the changes the board is proposing to rename the trust Framlington Innovative Growth (FIG). The renaming and changes are being introduced to make it clear to the market what the trust actually invests in, according to Watson.
He added that the recent good performance of trust has not been recognised by the market as it continues to trade above a 20% discount to NAV. Between 30 June 1999 and 10 March 2000 the trust's NAV rose by 64% while the FTSE SmallCap index increased by 37%.
Others trusts in the smaller companies sector, such as Murray Enterprise, AIM and Edinburgh Smaller Companies have performed better than FIG.
Wilson said that his portfolio is less focused on technology stocks preferring companies which can actually achieve 15-20% rather than companies which are forecasted to grow by 50% and above.
£1bn business since inception
Considered doing so in 2015
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