Montanaro UK Smaller Companies Investment Trust (LSE:MTU) posted annual results for the year ended 31 March, with short-term performance weighed down by a period in which UK quoted smaller companies underperformed their larger counterparts by 12%.
The trust, which pursues a "Quality Growth" strategy focused on profitable, cash-generative UK small-cap businesses, said the challenging backdrop reflected elevated geopolitical uncertainty and sentiment-driven style rotations rather than fundamental deterioration.
Net gearing stood at 3.3% at 31 March, following renewal of a £30 million revolving credit facility with BNY Mellon in December 2024 at the prevailing SONIA rate plus 1.3%.
The board noted that effective from 31 December 2024, the investment management fee of 0.50% per annum is now calculated on net assets rather than gross assets, a change it described as among the most competitive within the UK small-cap investment trust sector.
Chairman Arthur Copple said the trust would "continue to deliver an attractive and certain quarterly income" while reserves remain available to sustain dividend payments, with quarterly dividends calculated at the end of March, June, September and December.
Copple pointed to February's first net inflows into UK All Companies funds in almost five years as one of several indicators that investor sentiment toward UK equities may be shifting, drawing parallels with the recovery in smaller companies that followed the 2000 technology bubble.
The 2026 annual general meeting notice has been included in the published annual report.
