In an environment of slowing growth in Europe, a looming ‘no deal’ Brexit, a US/China trade war spiralling into a currency war and negative bond yields/inverted yield curves (where the cost of borrowing for the short-term is more expensive than the cost of borrowing for the long-term – usually a predictor of recessions), it might be tempting to hide, ‘ostrich-like’, in cash. Montanaro European Smaller Companies (MTE) offers an alternative solution. Its managers see little reward in trying to game the swings in macroeconomic sentiment. Instead, MTE’s manager’s focus is on picking stocks – identifying growing companies with strong business franchises, high-quality management, earnings and corporate structures…. Read more
Strong, sector-leading NAV growth (see page 6) is attracting new investors to MTE and this is helping to drive down its discount to NAV. The trust’s share price briefly traded at a premium to its asset value earlier this summer. We think it could do so again and for a more sustained period if the trust continues to outperform both its peers and its benchmark.
Continental European smaller companies
MTE aims to achieve capital growth by investing principally in Continental European quoted smaller companies. The benchmark index is the MSCI Europe ex UK Small Cap Index (in sterling terms).
NB: Marten & Co was paid to produce this note on Montanaro European Smaller Companies Trust and it is for information purposes only. It is not intended to encourage
the reader to deal in the security or securities mentioned in this report. Please read the important information at the back of this note. QuotedData is a trading name of
Marten & Co Limited which is authorised and regulated by the FCA. Marten & Co is not permitted to provide investment advice to individual investors categorised as Retail
Clients under the rules of the Financial Conduct Authority.