Fund Information / Factsheet • Mar 21, 2023
Fund Information / Factsheet
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Discrete year performance (%)
31/12/2021 to
31/12/2020 to
31/12/2019 to
31/12/2018 to
From July 2022, the benchmark changed from the EMIX Smaller European Companies ex UK Index to the MSCI Europe ex UK Small Cap Index.
| Performance over (%) |
6m | 1y | 3y | 5y | 10y |
|---|---|---|---|---|---|
| Share price (Total return) |
23.5 | 9.8 | 71.1 | 26.0 | 298.3 |
| NAV (Total return) |
18.5 | 8.6 | 71.6 | 43.2 | 276.6 |
| Benchmark (Total return) |
12.8 | 3.3 | 36.6 | 33.6 | 177.9 |
| Relative NAV (Total return) |
5.6 | 5.3 | 34.9 | 9.6 | 98.7 |
Share price (total return)
NAV (total return)
The Company outperformed the MSCI Europe ex UK Small Cap Index during the month.
Companies that have strong balance sheets generally performed well, including DFDS (passenger and freight ferries), JD Sports (retail stores) and Verallia (glass manufacturing). Detractors over the period included a semiconductor and a gaming company as they faced increased competition and weaker organic growth, respectively.
As we saw through our companies' earnings and results, valuations matter and as always we remained disciplined to the fundamentals. Indeed, with the confluence of these factors, we believe Europe remains a buying opportunity.
References made to individual securities do not constitute a recommendation to buy, sell or hold any security, investment strategy or market sector, and should not be assumed to be profitable. Janus Henderson Investors, its affiliated advisor, or its employees, may have a position in the securities mentioned.
The Company seeks capital growth by investing in smaller and medium sized companies which are quoted, domiciled, listed or have operations in Europe (excluding the UK).
Providing unique access to Europe's growing smalland medium-sized companies with the sole aim of increasing shareholder capital.
| NAV (cum income) | 194.5p |
|---|---|
| NAV (ex income) | 193.0p |
| Share price | 166.5p |
| Discount(-)/premium(+) | -14.4% |
| Yield | 2.6% |
| Net gearing | 12% |
| Net cash | - |
| Total assets Net assets |
£870m £780m |
| Market capitalisation | £667m |
| Total voting rights | 400,867,176 |
| Total number of holdings | 127 |
| Ongoing charges (year end 30 June 2022) |
0.65% |
| Overall Morningstar RatingTM |
|
| Benchmark | MSCI Europe ex UK Small Cap Index |
Source: BNP Paribas for holdings information and Morningstar for all other data. Differences in calculation may occur due to the methodology used.
Please note that the total voting rights in the Company do not include shares held in Treasury.
Please note the ongoing charge excludes the performance fee.
| 31/12/2017 to -34.5 -24.5 31/12/2018 n/a n/a n/a All performance, cumulative growth and annual growth data is sourced from Morningstar. |
|---|
| Source: at 28/02/23. © 2023 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, |
Please note that this chart could include dividends that have been declared
All performance, cumulative growth and annual growth data is sourced from Morningstar.
31/12/2022 -14.7 -12.5
31/12/2021 13.4 17.6
31/12/2020 36.4 33.2
Source: at 28/02/23. © 2023 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance does not predict future returns.
Please remember that past performance does not predict future returns. The value of an investment and the income from it can rise as well as fall as a result of market and currency fluctuations, and you may not get back the amount originally invested. Please refer to glossary for definition of share price total return.
How to invest Go to www.janushenderson.com/howtoinvest Find out more Go to www.europeansmallercompaniestrust.com
Geographical focus (%) France 15.5% Germany 15.3% Sweden 10.5% Italy 9.7% Netherlands 9.4% Switzerland 9.0% Spain 5.2% Belgium 4.2% Ireland 3.6%
Utilities 1.0%
| Key information | |
|---|---|
| -- | ----------------- |
| Stock code | ESCT | ||
|---|---|---|---|
| AIC sector | AIC European Smaller Companies |
||
| Benchmark | MSCI Europe ex UK Small Cap Index |
||
| Company type | Conventional (Ords) | ||
| Launch date | 1990 | ||
| Financial year | 30-Jun | ||
| Dividend payment | April, November | ||
| Risk rating (Source: Numis) |
Above average | ||
| Management fee | 0.55% pa on first £800m of net assets and 0.45% pa in excess thereof. |
||
| Performance fee | Yes | ||
| (See Annual Report & Key Information Document for more information) | |||
| Regional focus | Pan Europe | ||
| Fund manager appointment |
Ollie Beckett 2011 |
References made to individual securities do not constitute a n/a n/a recommendation to buy, sell or hold any security, investment strategy or market sector, and should not be assumed to be profitable. Janus Henderson Investors, its affiliated advisor, or its employees, may have a position in the securities mentioned.
The above geographical breakdown may not add up to 100% as this only shows the top 10.
All performance, cumulative growth and annual growth data is sourced from Morningstar. Share price total return is calculated using mid-market share price with dividends reinvested.
Please remember that past performance does not predict future returns. The value of an investment and the income from it can rise as well as fall as a result of market and currency fluctuations, and you may not get back the amount originally invested.
How to invest Go to www.janushenderson.com/howtoinvest Customer services 0800 832 832
Finland 3.1%
Recent global economic data has been mixed, reflecting improved conditions but persisting risks. The main concerns centre around inflation and geopolitical uncertainty. Energy prices have begun to come down, but inflation readings have remained high and central banks are sustaining a course of continued monetary policy tightening.
Due to the warmer winter in Europe this season, gas storage levels have exceeded expectations and gas prices have fallen dramatically. This dynamic has played its part in a better-than-expected company earnings season for the market and the portfolio. The biggest single stock contribution came from DFDS (passenger and freight ferries). The company has a strong balance sheet and operational updates were as we expected, with the strength over the month largely due to a reversal of a weaker January rather than any new information. With its valuation at current levels we remain bullish on the stock. We also saw good results from JD Sports (retail stores) as the company has forecast strong revenue growth, and this potential has been endorsed by major brands. This is crucial as about 50% of the major brands' products are exclusive to JD Sports, and are a differentiator for the company and sets it apart from many other retailers. The Company also benefited
from the holding in Verallia (glass manufacturing), which saw improved margins from product price increases and personnel cost inflation (as this has also started to ease).
Detractors over the period included Grenergy (power producer), u-blox (semiconductor devices) and Modern Times Group (gaming). Grenergy detracted from results as the company missed its earnings expectations. However, this reported miss was largely the result of the timing of its divestment from solar assets in Chile. We believe the core business remains in good shape. Another detractor, u-blox has been facing intense competition in the internet-of-things (IoT) space, but we remained comforted by record high order backlogs. For Modern Times Group sector weakness has resulted in weaker-than-expected organic growth. Still, the company has cash on the balance sheet which we expect to use on acquisitions. We remain positive on the stock.
Activity over the period included initiating new positions in Ionos, Eurogroup Laminations, and Banco Comercial. Ionos provides web hosting and cloud services solutions and is the market leader in Europe. Its services are sold at a trading discount compared to its US peer, the current internet domain market leader. We also bought Eurogroup Laminations which produces stators and rotors powering a variety of electronic applications. The company has a wellestablished market share with about half the install base of all electric cars, and currently has a large order backlog. Its balance sheet looks relatively healthy, but the company will
need to focus on delivering the order backlog and getting orders to clients. We also initiated a position in Portuguese bank, Banco Comercial. As a whole, Portugal has seen some solid growth following the pandemic as many have sought to work in warmer weather, and it has a visa scheme that has been friendly to businesses. There is a risk to the company from a Polish subsidiary that is facing headwinds over loans issued to Polish residents in Swiss francs. This has detracted from the bank's net income, and we will be monitoring this issue.
Sales in the fund over the month included Duerr (engineering and woodworking) and Friedrich Vorwerk (energy transportation and infrastructure). Duerr had seen strong growth since the pandemic as consumers were remodelling homes but this growth has since tapered. We took profits with the sale of the stock. Regular readers will be aware that we also had the remaining position of Friedrich Vorwerk under review from the prior month. The German energy company has shown a continued inability to manage projects effectively and keep them within budget, including most recently two liquefied natural gas projects. We remain positive on the "re-power EU" theme of the continents' ongoing energy transition but the management team of this company seem unlikely to translate that structural tail wind to higher earnings in our view.
After a succession of forecast downgrades, the global economy has seemed to finally turned a corner since the end of last year. Gas prices in Europe have more than halved over the last couple of months, and we no longer expect an imminent recession. Indeed, we are finding areas in the market where we think valuations are attractive. This brighter outlook is supported by growing evidence that inflation may have peaked (but still remains sticky), and central banks are closer to turning more dovish. We remain cautious here. As we saw through our companies' earnings and results, valuations matter and as always we remained disciplined to the fundamentals. Indeed, with the confluence of these factors, we think Europe remains a buying opportunity.
The amount by which the price per share of an investment company is either lower (at a discount) or higher (at a premium) than the net asset value per share (cum income), expressed as a percentage of the net asset value per share.
The effect of borrowing money for investment purposes (financial gearing). The amount a company can "gear" is the amount it can borrow in order to invest. Gearing is used in the expectation that the returns on the investments bought will exceed the costs of the borrowings that funded the purchase. This Company can also use synthetic gearing through derivatives and foreign exchange hedging and/or other non-fully funded instruments or techniques.
The Company's leverage is the sum of financial gearing and synthetic gearing. Details of the Company's leverage limits can be found in both the Key Information Document and Annual Report. Where a company utilises leverage, the profits and losses incurred by the company can be greater than those of a company that does not use leverage.
Month end closing mid-market share price multiplied by the number of shares outstanding at month end.
The total value of a fund's assets less its liabilities.
The value of investments and cash, including current year revenue, less liabilities (prior charges such as loans, debenture stock and preference shares at fair value).
The value of investments and cash, excluding current year revenue, less liabilities (prior charges such as loans, debenture stock and preference shares at fair value).
The theoretical total return on shareholders' funds per share reflecting the change in Net Asset Value (NAV) assuming that dividends paid to shareholders were reinvested at NAV at the time the shares were quoted ex-dividend. A way of measuring investment management performance of investment trusts which is not affected by movements in discounts/premiums.
Total assets minus any liabilities such as bank loans or creditors.
A company's net exposure to cash/cash equivalents expressed as a percentage of shareholders' funds, after any offset against its gearing. This is only shown for companies that have gearing in place.
A company's total assets (less cash/cash equivalents) divided by shareholders' funds expressed as a percentage.
The total expenses for the financial year (excluding performance fee), divided by the average daily net assets, multiplied by 100.
The key measure used to assess risk is volatility of returns, using historic net asset value (NAV) performance of the company over 1 and 3 years. In this instance volatility measures how much a company's NAV fluctuates over time in relation to the UK Equity market. The higher a volatility figure, the more the NAV has fluctuated (both up and down) over time. Please note that risk categorisations are indicative and based principally on historic data and should not be solely relied upon when making investment decisions.
Closing mid-market share price at month end.
The theoretical total return to the investor assuming that all dividends received were reinvested in the shares of the company at the time the shares were quoted ex-dividend. Transaction costs are not taken into account.
Cum Income NAV multiplied by the number of shares, plus prior charges at fair value.
Calculated by dividing the current financial year's dividends per share (this will include prospective dividends) by the current price per share, then multiplying by 100 to arrive at a percentage figure.
For a full list of terms please visit:
https://www.janushenderson.com/en-gb/investor/glossary/
Overall Morningstar Rating™ is a measure of a fund's risk-adjusted return, relative to similar funds. Fund share classes are rated from 1 to 5 stars, with the best performers receiving 5 stars and the worst performers receiving a single star. Overall Morningstar Rating™ is shown for Janus Henderson share classes achieving a rating of 4 or 5. Ratings should not be taken as a recommendation. For more detailed information about Morningstar Ratings, including its methodology, please go to global.morningstar.com/managerdisclosures.
Not for onward distribution. Before investing in an investment trust referred to in this document, you should satisfy yourself as to its suitability and the risks involved, you may wish to consult a financial adviser. This is a marketing communication. Please refer to the AIFMD Disclosure document and Annual Report of the AIF before making any final investment decisions. Past performance does not predict future returns. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested. Tax assumptions and reliefs depend upon an investor's particular circumstances and may change if those circumstances or the law change. Nothing in this document is intended to or should be construed as advice. This document is not a recommendation to sell or purchase any investment. It does not form part of any contract for the sale or purchase of any investment. We may record telephone calls for our mutual protection, to improve customer service and for regulatory record keeping purposes.
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