Gervais' Gartmore exit comes despite strong trust performance

Gervais Williams’ final set of performance figures with Gartmore have seen the manager exit his £55 million trust in a blaze of glory.

Gartmore Growth Opportunities, the UK small caps investment company, pushed past its benchmark during the 12 months to 30 June, returning a 19.8% increase in its net asset value (NAV) and beating the FTSE SmallCap Index by 3.2%.

Despite a slight set back at its half-year point, Williams’ former trust – now in the hands of the Gartmore UK Smaller Companies team – also saw its share price jump 23%, rising from 379.75p to 467p over the year.

Its focus on the smaller companies universe may have worked against it over the second half of its financial year, as the price of larger and mid cap businesses held up well in the volatile conditions.  But the trust ended the year on a high with its AIM-listed holdings key drivers of performance.

Going forward, the investment trust has refreshed its board with the appointment of a pair of new directors –Ian Dighe and Allan Jenkins.

And as the latter part of the year made it clear volatility would continue and a smooth recovery looks unlikely, the trust has been positioned to take advantage of opportunities in companies able to compound their dividends.

Without strong economic growth the team in charge of the vehicle believe most larger firms will struggle to grow earnings, with market indices delivering littly capital gain over the coming years.

'Within this context, the prospect of receiving a reliable dividend each year becomes much more important,' the managers explained in their report to the stockmarket.

'In particular the power of compounding dividends year after year is often overlooked by investors.  We believe that by taking advantage of this trend over the coming years we will have scope to deliver returns that may be well above those available from other market sectors.'

At the end of June, the trust's largest positions were in the general industrials and technology sectors, which together accounted for around 40% of its holdings.

It currently trades at an 7.8% discount, on par with its average.