Investment trust analysts at Numis have highlighted a buying opportunity on Harry Nimmo’s investment trust after it moved to a discount following a period of underperformance.
In the annual report for the Standard Life UK Smaller Companies Trust today, the board revealed the trust had significantly underperformed the index in the year to the end of June 2014.
The trust delivered a net asset value total return of 7.7 per cent in the period, compared to the return of 20.3 per cent from its benchmark, the Numis Smaller Companies index.
In spite of the underperformance, the board reaffirmed its support for Standard Life Investments and Harry Nimmo, given the manager’s exceptional long-term track record on the trust, which has seen it deliver a return of 410.4 per cent since 2003.
Given the long-term outperformance, Numis analysts Charles Cade and Ewan Lovett-Turner said the fact that the trust’s shares have moved from a premium relative to the net value of its assets to a discount of 6.7 per cent represented an opportunity for new investors.
“We believe this may represent an attractive entry point to gain access to an established manager with a strong long-term track record with the potential to benefit from discount narrowing if the manager can turnaround performance,” Numis said.
