Blackrock Smaller Companies Trust PLC Fund Data

During February the Company's NAV per share returned - 0.1% to 1,579.12p on a total return basis, while our benchmark index, the Deutsche Numis Smaller Companies plus AIM (excluding Investment Companies) Index, returned 0.8%. Equity markets continued to grind higher, although leadership broadened meaningfully beneath the surface. Investors rotated away from more crowded AI and software names towards cyclical and value-oriented areas, as questions emerged around the near-term payback from elevated levels of AI investment. At the same time, macro conditions were influenced by policy uncertainty in the US, particularly around trade tariffs, and a late-month escalation in geopolitical tensions in the Middle East, which drove a modest shift in risk sentiment. UK equities advanced over the month, with the FTSE All Share Index rising 6.5%, supported by strength in more defensive large-cap areas. In contrast, UK small and mid-cap companies underperformed, delivering a small positive return, reflecting both style headwinds and continued outflows from the asset class. At a sector level, financials were the largest detractor, reflecting macro volatility and increased concerns around credit risk. Holdings including XPS Pensions, IntegraFin and Tatton Asset Management all detracted despite an absence of company-specific news. Pollen Street Capital also underperformed, caught up in broader weakness across private credit and alternative asset managers. Elsewhere, Boku's share price declined, likely reflecting broader weakness across payments-related names linked to the ongoing rotation away from AI beneficiaries. We do not believe this reflects any change in the company's fundamentals, with its multi-jurisdictional payments network remaining a highly differentiated and difficult-to-replicate asset. On the positive side, Ithaca Energy was a strong contributor, benefiting from higher oil prices following the escalation of tensions in the Middle East. The company also delivered a positive trading update, with production in line with upgraded guidance and further capacity growth expected into 2026. Pan African Resources also performed well, reporting strong interim results driven by higher gold production and elevated realised prices. Meanwhile, Senior, the aerospace and defence engineer, saw its share price rise following confirmation that it had received multiple takeover approaches, highlighting ongoing M&A (Mergers & Acquisitions) interest across the UK market. The current backdrop remains uncertain, with geopolitical tensions, fiscal pressures and structural industry changes continuing to shape the investment environment. In the UK, recent policy decisions have increased the burden on businesses and may slow the pace at which interest rates can be reduced. This has contributed to sustained outflows from UK equities, with small and mid-cap companies particularly affected. However, history suggests that this part of the market has demonstrated resilience through previous periods of disruption, including the Global Financial Crisis, Brexit and the pandemic. We also note that elevated levels of M&A activity in the UK point to the attractiveness of valuations, with strategic and financial buyers recognising the opportunity. In our view, this reinforces the long-term investment case for UK smaller companies, even as near-term sentiment remains subdued. We thank shareholders for your ongoing support.

During February the Company's NAV per share returned - 0.1% to 1,579.12p on a total return basis, while our benchmark index, the Deutsche Numis Smaller Companies plus AIM (excluding Investment Companies) Index, returned 0.8%. Equity markets continued to grind higher, although leadership broadened meaningfully beneath the surface. Investors rotated away from more crowded AI and software names towards cyclical and value-oriented areas, as questions emerged around the near-term payback from elevated levels of AI investment. At the same time, macro conditions were influenced by policy uncertainty in the US, particularly around trade tariffs, and a late-month escalation in geopolitical tensions in the Middle East, which drove a modest shift in risk sentiment. UK equities advanced over the month, with the FTSE All Share Index rising 6.5%, supported by strength in more defensive large-cap areas. In contrast, UK small and mid-cap companies underperformed, delivering a small positive return, reflecting both style headwinds and continued outflows from the asset class. At a sector level, financials were the largest detractor, reflecting macro volatility and increased concerns around credit risk. Holdings including XPS Pensions, IntegraFin and Tatton Asset Management all detracted despite an absence of company-specific news. Pollen Street Capital also underperformed, caught up in broader weakness across private credit and alternative asset managers. Elsewhere, Boku's share price declined, likely reflecting broader weakness across payments-related names linked to the ongoing rotation away from AI beneficiaries. We do not believe this reflects any change in the company's fundamentals, with its multi-jurisdictional payments network remaining a highly differentiated and difficult-to-replicate asset. On the positive side, Ithaca Energy was a strong contributor, benefiting from higher oil prices following the escalation of tensions in the Middle East. The company also delivered a positive trading update, with production in line with upgraded guidance and further capacity growth expected into 2026. Pan African Resources also performed well, reporting strong interim results driven by higher gold production and elevated realised prices. Meanwhile, Senior, the aerospace and defence engineer, saw its share price rise following confirmation that it had received multiple takeover approaches, highlighting ongoing M&A (Mergers & Acquisitions) interest across the UK market. The current backdrop remains uncertain, with geopolitical tensions, fiscal pressures and structural industry changes continuing to shape the investment environment. In the UK, recent policy decisions have increased the burden on businesses and may slow the pace at which interest rates can be reduced. This has contributed to sustained outflows from UK equities, with small and mid-cap companies particularly affected. However, history suggests that this part of the market has demonstrated resilience through previous periods of disruption, including the Global Financial Crisis, Brexit and the pandemic. We also note that elevated levels of M&A activity in the UK point to the attractiveness of valuations, with strategic and financial buyers recognising the opportunity. In our view, this reinforces the long-term investment case for UK smaller companies, even as near-term sentiment remains subdued. We thank shareholders for your ongoing support.