F&C U.S. Smaller FSC Interim Management Statement

  F&C U.S. Smaller (FSC) - Interim Management Statement

RNS Number : 4398R
F&C U.S. Smaller Companies PLC
19 November 2012




F&C US Smaller Companies PLC

Interim Management Statement

For the four months ended 31 October 2012



Investment Objective

To achieve long-term capital growth by investing in a diversified portfolio
primarily of quoted US smaller and medium sized companies.



Performance summary



                                 31 October 30 June 

                                      2012   2012 Movement

                                           
Net assets                          £106.36m £99.25m     7.2%


Net asset value ("NAV") per share                         

                                    488.57p 468.32p     4.3%
Share price                          493.00p 466.50p     5.7%


Russell 2000 Index                                        

 (sterling adjusted)              508.20  509.09   (0.2%)


Premium/(discount) to NAV                                 

per share                               0.9%  (0.4%)





Four month review



The NAV per share rose  by 4.3% in the four  months to 31 October 2012.  This 
compares to a fall of 0.2% in the benchmark, the Russell 2000 Index  (sterling 
adjusted), during the same period.



In the  four  month  period,  the  market  rose  in  anticipation  of  further 
quantitative easing by the Fed but, once this was announced, it retreated. The
US economy has remained in a mid-cycle slowdown.



The best performing stocks which had  the most impact on the performance  were 
the retailer Conn's, which continues  a two-year turnaround, Lincare  Holdings 
(home oxygen) which agreed to  a bid from Linde  AG and Cardinal Financial  (a 
regional bank based in Virginia), which reported strong results. Disappointing
performance came from  ICF International  (a consultant) which  fell on  fears 
that sequestration of Federal spending would hit sales.



We  bought  four   new  holdings:  Alere   (diagnostic  supplies),   Safeguard 
Scientifics (venture capital  investments), Spectrum  Pharmaceuticals and  WMS 
Industries  (gaming  equipment).  The  following  stocks  were  sold:  Lincare 
Holdings, Lumos  Networks, NTELOS  Holdings, Teledyne  Technologies and  Waste 
Connections.



The Company is not currently geared.



There have been no share buybacks during the period but the Company issued
530,000 shares. Shares have been issued at an average premium of 1.1% to the
published NAV on the day of issue.



Ten Largest Holdings



                                                                          

31Oct 30 June Company                                          Percentage of

 2012    2012   Description                                 total investments
   1       2    Conn's

                Retailer of home appliances, furniture and
                consumer electronics.                                      3.1
   2      34    DeVry

                Post secondary education                                   2.5
   3       6    America's Car-Mart

                Used car retailer.                                         2.5
   4      19    LKQ

                Distributor of recycled and aftermarket car
                parts.                                                     2.5
   5      15    Rex Energy

                Oil and gas exploration and production.                    2.4
   6       7    Airgas

                Distributor of bottled gases.                              2.4
   7       9    Granite Construction

                Civil construction contractor.                             2.4
   8       3    Pool

                Distributor of swimming pool supplies.                     2.4
   9      29    Cardinal Financial

                Regional bank                                              2.3
  10      22    Simpson Manufacturing

                Manufacturer of reinforcement products.                    2.3









Industrial Classification



                                                                     

                                       31 October 2012      30 June 2012

                       Percentage of total investments     Percentage of

                                                       total investments
Producer Durables                                 25.4              29.9
Consumer Discretionary                            20.9              19.2
Financial Services                                19.1              14.9
Technology                                        10.5              11.2
Healthcare                                         6.7               5.7
Consumer Staples                                   4.9               5.5
Materials & Processing                             4.7               4.6
Utilities                                          4.2               5.2
Energy                                             3.6               3.8



Outlook



The US economy is stuck in a mid-cycle slowdown but it is showing some (as yet
limited)  signs  of  improvement,   with  recent  ISM  Manufacturing   Surveys 
suggesting a modest acceleration of activity. The global economic backdrop  is 
concerning as is tension in the Middle East. Political leadership is  required 
to deal with the  much-hyped "Fiscal Cliff", a  political problem that can  be 
resolved if politicians on Capitol Hill so choose.



The Board is not  aware of any significant  events or transactions which  have 
occurred between 31 October 2012 and the date of publication of this statement
which would have a material impact on the financial position of the Company.





Daily and Key Information

Further information regarding  the Company, including  monthly factsheets  and 
daily NAVs published since the end of the period are available on the internet
at www.fandcussmallers.com







By order of the Board

F&C Management Limited, Secretary

19 November 2012

                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


IMSLLFLLLRLALIF -0- Nov/19/2012 11:18 GMT
 
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