Scottish Oriental Smaller Companies

LN: SST

Market Cap£245m

Last Close 834p

SST’s objective is to provide shareholders with long-term capital growth through investment in smaller Asian (excluding Japanese and Australasian) quoted companies. Its assets are invested in a diversified portfolio of equities. While the manager takes account of cultural, political and economic factors, stock specific features are the main driver of portfolio selection, with the aim of identifying good-quality companies with solid, long-term growth prospects.

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Investment summary

Scottish Oriental Smaller Companies Trust (SST) aims to deliver long-term capital growth from investing in smaller companies listed in Asia ex-Japan. The investment approach is bottom-up to find quality companies with sustainable growth that are reasonably valued. Unconstrained by the benchmark, the well-diversified portfolio of c 60 stocks represents the manager’s highest-conviction ideas, with a preference for domestically oriented businesses in less-developed economies, which can benefit from structural growth drivers. SST has a strong, long-term performance track record and over 10 years has delivered an annualised NAV total return of 18.5%. The trust’s current 14.9% discount to cum-income NAV is deeper than its three-year average, in part reflecting a more risk-averse market sentiment. There is scope for this discount to narrow should sentiment towards Asian equities, and small-caps in particular, improve.