Long COVID effect requires a focus on corporate health
In absolute terms, Montanaro UK Smaller Companies Trust (MTU) has been generating healthy returns for its shareholders; both the share price and the NAV are close to all-time highs. However, recently MTU has given up some of its earlier outperformance.
As vaccines are rolled out, the end of lockdowns is finally in sight and we are all eager to get back to ‘normal’. Last November, the news that a number of vaccines were effective triggered a surge in stock markets and a sharp rotation from high quality and growth stocks into riskier and/or ‘value-style’ stocks. This did not suit MTU’s investment approach.
MTU’s manager, Charles Montanaro, is convinced that this is likely to be a short-term setback. He believes that the long-term economic effects of COVID will put a severe strain on companies with unsustainable business models and some may fail. MTU will stick with its quality and growth focus.
UK small cap with a bias to quality
MTU aims to achieve capital appreciation through investing in small quoted…
