Edison Updates on abrdn UK Smaller Companies Growth Trust's Performance Recovery

Edison Investment Research Limited has issued a new update on the abrdn UK Smaller Companies Growth Trust (AUSC), signaling a positive turnaround in its performance. Managers Abby Glennie and Amanda Yeaman anticipate further improvements, attributing optimism to a shift in investor focus towards company fundamentals over macroeconomic trends. The guiding strategy for portfolio selection involves a proprietary tool, the Matrix, which identifies companies with high-quality characteristics, growth potential, and positive momentum.

Despite challenges in 2022, particularly due to rising interest rates which impacted growth stocks, the trust’s long-term strategy has shown resilience and success over more than 25 years, spanning multiple business cycles. The trust’s universe offers numerous opportunities for investment, with many companies within the portfolio showing positive earnings estimates and operational robustness, as confirmed in meetings.

AUSC has not only aimed for capital growth but has also seen a consistent increase in its annual dividends, growing at a compound rate of 9.5% over the past five years despite a dip during the COVID pandemic. This performance is supported by diversified income from portfolio companies, including both special and regular dividends.