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Fund Profile

abrdn Smaller Companies Income 02 December 2022


This is a non-independent marketing communication commissioned by abrdn. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

ASCI offers a differentiated way to invest in UK smaller companies…

abrdn Smaller Companies Income Trust (LON:ASCI) is managed by Abby Glennie and Amanda Yeaman, who aim to generate capital growth and a sustainable and growing dividend from the UK small cap market. As discussed in Management, longstanding UK smaller companies’ veteran Harry Nimmo will retire at the end of 2022 which will see Abby taking the Investment Lead role on the smaller companies team, with Amanda taking the lead manager role on ASCI from the start of 2023.

Abby and Amanda’s process focusses on identifying high-quality companies that demonstrate positive earnings’ momentum and long-term growth potential. The pair are assisted by the quantitative proprietary Matrix tool, used to screen the universe before a deeper qualitative analysis is undertaken where the team can leverage the wider resources within abrdn, including abrdn’s UK equity team, for ASCI. The team also apply filters on the income-generating characteristics of the companies. ESG analysis is integrated throughout the investment process.

As discussed in Performance, although there have been some pockets of resilience in the portfolio, ASCI has been impacted by the broader market sell-off this year. This has been as a result of more challenging top-down economic conditions, which have impacted, particularly, smaller companies and quality growth-focussed strategies. This has impacted ASCI’s longer-term performance record against the benchmark and the global smaller companies’ peer group.

However, ASCI trades on a Discount of 17.4% at the time of writing which is significantly wider than the sector average of 10.3%. Combined with an attractive historic Dividend yield of 4.0%, as at 28/11/2022, which is the third highest in the sector, this may offer longer-term investors an opportune entry point should the stylistic headwinds subside.

Analyst's View

We believe that ASCI can provide investors with a differentiated opportunity within the UK smaller companies’ sector by offering an exposure to long-term capital growth and an attractive relative dividend yield, compared to the broader smaller companies’ sector. The board has demonstrated it values maintaining a progressive dividend which it can supplement with the trust’s substantial revenue reserves, should income wane from underlying holdings.

We think the retirement of Harry Nimmo is unlikely to impact the underlying investment strategy since Abby and Amanda have worked closely with him for several years, with the process instilled throughout the smaller companies’ team. The pair have demonstrated an ability to maintain not only conviction in their winners, but also, with the help of the Matrix, a strong selling discipline regarding holdings that no longer fit those characteristics the managers seek.

Given that ASCI’s discount is wider than its five-year average, the sector’s average and also, to a greater extent, abrdn’s UK Smaller Companies Growth Trust (AUSC), which is also co-managed by Abby, this may provide investors with an attractive entry point. However, we would caution that it may take longer than expected initially for sentiment to improve and earnings to recover.


  • Well-supported dividend, with relatively high yield compared to sector
  • Wider-than-average discount relative to the sector
  • Consistent investment strategy, benefitting from access to abrdn’s wider UK equity research team


  • May continue to lag during value or cyclically-driven market rallies
  • ASCI’s small size may deter institutional investors with minimum size restrictions
  • Charges are relatively high compared to peers
Continue to Portfolio

Fund History

26 Jul 2023 Our board and saviour
Boards are proving their value as discounts languish…
18 Jan 2023 Fortune favours the brave
Our research suggests a recession has already been priced into small cap trusts, but risks abound...
02 Dec 2022 Fund Analysis
ASCI offers a differentiated way to invest in UK smaller companies…
21 Mar 2022 Fund Analysis
ASCI offers a growing dividend from a source that could diversify income portfolios…
16 Feb 2022 Perfectly formed
Our research suggests that investment trusts really are a better way to gain exposure to smaller companies…
15 Sep 2021 Bargains galore
We review our discounted opportunities portfolio, with one constituent rallying more than 30% in just two months…
11 Aug 2021 In at the deep end
Does seeking out wider-than-usual discounts help investors systematically outperform in the UK trust space?
14 Jul 2021 Grade inflation
We look at how our discounted opportunities portfolio has done in the first half of the year and update on the performance of our long-term rated funds…
23 Jun 2021 Fund Analysis
ASCI has outperformed over the current managers’ tenure…
02 Jun 2021 Fortune favours the brave (sometimes)
Our research suggests wide discounts often herald high NAV returns too…
14 Apr 2021 Wide Boys
We review our portfolio of chonky discounts as one star performer hits its target…
22 Mar 2021 Results analysis: Aberdeen Smaller Companies Income
Reporting results for the year ending 31 Dec 2020, ASCI remains a solid trust on a significant discount to peers…
09 Dec 2020 Fund Analysis
Aberdeen Smaller Companies Income (ASCI) has generated outperformance since the change of strategy and currently offers a 2.8% yield…
06 Apr 2020 Fund Analysis
ASCI offers investors both capital appreciation and income from a portfolio of high-quality UK smaller companies…
25 Sep 2019 Fund Analysis
Offering income seekers a chance to diversify their source of dividends, ASCI has a portfolio of smaller companies with strong growth potential…
01 Aug 2019 Rethinking UK equity income
Despite being a popular allocation for investors, the UK Equity Income sector is currently plagued by the problem of concentration. Our analysis suggests smaller companies could be a strong alternative source of diversified income…
26 Jun 2019 Measure for measure
In the first of a two-part series, we examine the tools investors can use to assess how active a manager actually is…
01 May 2019 Sweet or sour?
Three months in, we check up on our list of discount opportunities...
13 Feb 2019 Sweet treats
Eight trusts with the potential for strong returns, currently sitting on unusual discounts...
06 Feb 2019 Income for the long haul
With 'ISA season' looming we identify investment trusts which offer long-term, dependable income streams for yield-hungry investors...
01 Feb 2019 Fund Analysis
Under the watchful eye of a new manager, Aberdeen Smaller Companies Income targets income and capital growth from UK smaller caps...
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