**Summary**
BlackRock Smaller Companies Trust PLC released its portfolio update as of June 30, 2025, highlighting performance, asset values, and market insights. Key points include
1. **Performance Metrics**
One-month NAV return+0.9%
Share price+1.9%.
One-year NAV return-4.0%
Share price-6.1%.
Five-year NAV return+26.1%
Share price+18.4%.
Benchmark (Deutsche Numis Smaller Companies plus AIM Index) outperformed with +42.1% over five years.
2. **Financial Highlights**
Net asset value (NAV) including income (debt at fair value): 1,501.30p.
Share price: 1320.00ptrading at a 12.1% discount to NAV.
Net yield3.3%
Gross assetsยฃ679.9m
Gearing8.3%.
3. **Sector and Country Weightings**
Top sectors: Industrials (29.2%)Financials (26.0%)Consumer Discretionary (12.7%).
Geographic focus: 97.3% UK2.7% US.
4. **Top Holdings**
Largest equity investments include IntegraFin (2.7%), Boku (2.7%), and XPS Pensions (2.5%).
5. **Market Commentary**
UK market faced challenges from inflation, political uncertainty, and geopolitical tensions (e.g., Israel-Iran conflict).
Positive factors: Falling rateslow unemploymentreal wage growthand reduced regulatory burden.
M&A activity remained robust, with 30 bids for UK firms totaling ยฃ25 billion year-to-date.
6. **Performance Drivers**
Top contributorsPayPoint (resilient results, share buyback, dividend increase), Boku (liquidity improvement), and Tatton Asset Management (record AUM and inflows).
Detractors: BreedonIbstockand MJ Gleeson (weathercost pressuresand planning delays).
7. **Outlook**
Cautious optimism for the UK market despite recent setbacks, with valuations seen as attractive amid global uncertainty.
Trade deals and European fiscal stimulus could benefit UK companies.
M&A activity highlights undervaluation in UK SMID caps, offering potential opportunities for investors.
The update underscores the trustโs focus on navigating market volatility while seeking value in the UK smaller companies segment.
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