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About this investment trust

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

The Company aims to achieve long-term capital growth for shareholders through investment mainly in smaller UK quoted companies.

Why choose it?

We aim to find the ‘hidden gems’ within the small cap universe, investing in high-quality growth companies that are able to shape their own futures regardless of the wider economic environment. As active managers, we believe this area presents us with an attractive hunting ground: these companies are often under-researched, and pricing is inefficient. This gives us great opportunities to generate returns for our clients over the long term.

Suited to…

Investors looking for carefully selected opportunities among the UK’s vibrant small cap sector for long-term capital growth. Investors need to be able to tolerate variation in their capital.

BlackRock Smaller CompaniesTrust FAQs

  • The BlackRock Smaller Companies Trust’s seeks to achieve long-term capital growth for investors by predominantly investing in smaller UK companies. It aims to uncover “hidden gems” within the small-cap realm, focusing on high-quality growth companies capable of shaping their own futures irrespective of broader economic conditions. As active managers, the Trust views the small-cap space as attractive for its potential for under-researched opportunities and inefficient pricing, providing ample opportunities to generate returns over the long term.

  • Roland Arnold has been the manager of BlackRock Smaller Companies Trust since 2018. He is also co-manager of the BlackRock UK Special Situations Fund, a manager of Small and Mid-Cap UK Equity Portfolios and a member of the UK Equity Team.

  • Dividends are declared and paid out semi-annually. Interim dividend payments are made in November with the final payment of dividends on ordinary shares being paid in June.

  • The smaller companies sector which the BlackRock Smaller Companies Trust invests in is home to numerous market-leading businesses that have historically outperformed larger companies over the long term1. Smaller companies can be more focused, enabling investors to target niche growth areas that may not be as accessible with larger, more diversified companies. They can respond quickly to market changes, and be more entrepreneurial in seizing opportunities. Overall, investing in smaller companies can enhance returns and bring valuable diversification to client portfolios.2

    1 Source: Kepler Trust Intelligence as at June 2023.
    2 Source: BlackRock as at April 2023.

  • Smaller companies may be considered to be riskier investments due to factors including greater volatility, limited financial resources, lower market liquidity, concentrated business risk and a limited track record. Smaller companies can experience higher price fluctuations, making them more susceptible to economic downturns and unexpected challenges. Their limited financial resources may pose challenges during adverse market conditions, and lower liquidity can result in larger price swings.

    Despite these risks, smaller companies could offer growth opportunities and the BlackRock Smaller Companies Investment Trust actively manages these challenges to potentially capitalise on higher returns while navigating associated risks through thorough research and strategic investment decisions.

Image of Morningstar rating logo 

Morningstar Rating: Since January 2012.
Awards/Ratings have not been superseded to date.

The Morningstar Analyst Rating is subjective in nature and reflects Morningstar’s current expectations of future events/behaviour as they relate to a particular fund. Because such events/behaviour may turn out to be different than expected, Morningstar does not guarantee that a fund will perform in line with its Morningstar Analyst Rating. Likewise, the Morningstar Analyst Rating should not be seen as any sort of guarantee or assessment of the creditworthiness of a fund or of its underlying securities and should not be used as the sole basis for making any investment decision.

Past performance is not a reliable indicator of future results and should not be the sole factor of consideration when selecting a product or strategy.

What are the risks?

  • Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.
  • Net Asset Value (NAV) performance is not the same as share price performance, and shareholders may realise returns that are lower or higher than NAV performance.
  • The Trust’s investments may have low liquidity which often causes the value of these investments to be less predictable. In extreme cases, the Trust may not be able to realise the investment at the latest market price or at a price considered fair.
  • Investment strategies, such as borrowing, used by the Trust can result in even larger losses suffered when the value of the underlying investments fall.
  • Smaller company investments are often associated with greater investment risk than those of larger company shares.

Useful information

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

Fees & Charges

Annual Expenses as at Date: 28/02/2023

Ongoing Charge (including any Performance Fee): 0.7%

Management Fee Summary: BlackRock receives an annual fee which is calculated based on 0.60% in respect of the first GBP 750m of the Company's total assets less current liabilities, reducing to 0.50% thereafter. There are no performance fee arrangements in place.

  • ISIN: GB0006436108

    Sedol: 0643610

    Bloomberg: BRSC:LN

    Reuters: BRSC.L

    LSE code: BRSC

  • Name of Company: BlackRock Fund Managers Limited

    Telephone: 020 7743 3000



    Correspondence Address: Investor Services

    BlackRock Investment Management (UK) Limited

    12 Throgmorton Avenue


    EC2N 2DL

    Name of Registrar: Computershare PLC

    Registered Office: Exchange Place 1

    1 Semple Street

    Edinburgh EH3 8BL

    Registrar Telephone: +44 (0)370 707 1649

    Place of Registration: Scotland

    Registered Number: 006176

  • Year End: 28 February

    Results Announced: October (interim), April/May (final)

    AGM: July

    Dividends Paid: November (interim), June (final)

Latest company announcements

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

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To receive email alert notifications once an update to the Trust occurs, please sign up and select the updates you would like to receive via The Association of Investment Companies website here.

The Board's approach to ESG

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

Environmental, social and governance (ESG) issues can present both opportunities and threats to long-term investment performance. Whilst the Company does not exclude investment in stocks purely on ESG criteria, ESG analytics are fully integrated into the investment process when weighing up the risk and reward benefits of investment decisions and the Board believes that communication and engagement with portfolio companies is important and can lead to better outcomes for shareholders and the environment than merely excluding investment in certain areas.

More information on BlackRock’s global approach to ESG integration, as well as activity specific to the BlackRock Smaller Companies Trust plc portfolio, is set out below. BlackRock has defined ESG integration as the practice of incorporating material ESG information and consideration of sustainability risks into investment decisions in order to enhance risk-adjusted returns. ESG integration does not change the Company’s investment objective or constrain the Investment Manager’s investable universe, and does not mean that an ESG or impact focused investment strategy or any exclusionary screens have been or will be adopted by the Company. Similarly, ESG integration does not determine the extent to which the Company may be impacted by sustainability risks. More information on sustainability risks may be found in the AIFMD Fund Disclosures document of the Company available on the Company’s website at

The BlackRock portfolio management team has excellent access to company management teams and undertakes about 700 company meetings each year to identify high quality, cash generative businesses with strong management teams that are able to generate growth in a more challenging economic environment. In addition, BlackRock also has a separate Business Investment Stewardship (BIS) team that is committed to promoting sound corporate governance through engagement with investee companies, development of proxy voting policies that support best governance practices and wider engagement on public policy issues. For the year to 28 February 2022, BIS held 32 company engagements on a range of governance issues with the management teams of 25 companies in the BlackRock Smaller Companies Trust portfolio, representing 23.3% of the portfolio by value at 28 February 2022. Additional information is set out in the table below.

  Year ended 28 February 2022
Number of engagements held1 32
Number of companies met1 25
% of equity investments covered2 23.3
Shareholder meetings voted at1 133
Number of proposals voted on1 1,690
Number of votes against management1 98
% of total votes represented by votes against management 5.8

1Source: Institutional Shareholder Services as at 28 February 2022.
2Source: BlackRock. Company valuation as included in the portfolio at 28 February 2022 as a percentage of the total portfolio value.

BlackRock believes that sustainability risk – and climate risk in particular - now equates to investment risk, and this will drive a profound reassessment of risk and asset values as investors seek to react to the impact of climate policy changes. This in turn, in BlackRock’s view, is likely to drive a significant reallocation of capital away from traditional carbon intensive industries over the next decade. BlackRock believes that carbon-intensive companies will play an integral role in unlocking the full potential of the energy transition, and to do this, they must be prepared to adapt, innovate and pivot their strategies towards a low carbon economy.

As part of BlackRock’s structured investment process, ESG risks and opportunities (including sustainability/climate risk) are considered within the portfolio management team’s fundamental analysis of companies and industries and the Company’s portfolio managers work closely with BlackRock’s Investment Stewardship team (BIS) to assess the governance quality of companies and investigate any potential issues, risks or opportunities.

As part of their approach to ESG integration, the portfolio managers use ESG information when conducting research and due diligence on new investments and again when monitoring investments in the portfolio. In particular, portfolio managers at BlackRock now have access to 1,200 key ESG performance indicators in Aladdin (BlackRock’s proprietary trading system) from third-party data providers. BlackRock’s internal sustainability research framework scoring is also available alongside third-party ESG scores in core portfolio management tools. BlackRock’s access to company management allows it to engage on issues that are identified through questioning management teams and conducting site visits. In conjunction with the portfolio management team, BIS meets with boards of companies frequently to evaluate how they are strategically managing their longer-term issues, including those surrounding ESG and the potential impact these may have on company financials. BIS’s and the portfolio management team’s understanding of ESG issues is further supported by BlackRock’s Sustainable Investment Team (BSI). BSI looks to advance ESG research and integration, active engagement and the development of sustainable investment solutions across the firm.

As a fiduciary to its clients, BlackRock has built its business to protect and grow the value of clients’ assets. As part of this fiduciary duty to its clients, BIS is committed to promoting sound corporate governance through engagement with investee companies, development of proxy voting policies that support best governance practices and also through wider engagement on public policy issues.

BlackRock’s approach to corporate governance and stewardship is explained in its Global Principles. These high-level Principles are the framework for BlackRock’s more detailed, market-specific voting guidelines, all of which are published on the BlackRock website. The Principles describe BlackRock’s philosophy on stewardship (including how it monitors and engages with companies), its policy on voting, its integrated approach to stewardship matters and how it deals with conflicts of interest. These apply across relevant asset classes and products as permitted by investment strategies. BlackRock reviews its Global Principles annually and updates them as necessary to reflect changes in market standards, evolving governance practice and insights gained from engagement over the prior year. BlackRock’s Global Principles are available on its website at

BlackRock’s voting guidelines are intended to help clients and companies understand its thinking on key governance matters. They are the benchmark against which it assesses a company’s approach to corporate governance and the items on the agenda to be voted on at the shareholder meeting. BlackRock applies its guidelines pragmatically, taking into account a company’s unique circumstances where relevant. BlackRock informs voting decisions through research and engages as necessary. BlackRock reviews its voting guidelines annually and updates them as necessary to reflect changes in market standards, evolving governance practice and insights gained from engagement over the prior year.

BlackRock’s market-specific voting guidelines are available on its website at

In 2021, BIS explicitly asked that all companies disclose a business plan aligned with the goal of limiting global warming to well below 2ºC, consistent with achieving net zero global greenhouse gas (GHG) emissions by 2050. BlackRock viewed these disclosures as essential to helping investors assess a company’s ability to transition its business to a low carbon world and to capture value-creation opportunities created by the climate transition. BlackRock also asked that companies align their disclosures to the Task Force on Climate-related Financial Disclosures (TCFD) framework and the SASB standards. For 2022, BIS is evolving its perspective on sustainability reporting to recognize that companies may use standards other than that of the SASB (Sustainability Accounting Standards Board), and reiterates its ask for metrics that are industry-specific or company-specific. BIS is also encouraging companies to demonstrate that their plans are resilient under likely decarbonization pathways, and the global aspiration to limit warming to 1.5°C. BIS is also asking companies to disclose how considerations related to having a reliable energy supply and just transition affect their plans. More information in respect of BlackRock’s investment stewardship approach to sustainable investing can be found at

BlackRock has been a member of Climate Action 100+ since 2020 and has aligned its engagement and stewardship priorities to UN Sustainable Development Goals (including Gender Equality and Affordable and Clean Energy). A map of how BIS’s engagement priorities align to the UN Sustainable Development Goals (SDGs) can be found at

BlackRock is committed to transparency in terms of disclosure on its engagement with companies and voting rationales and is committed to voting against management to the extent that they have not demonstrated sufficient progress on ESG issues. This year, BlackRock voted against or withheld votes from 6,560 directors globally at 3,400 different companies driven by concerns regarding director independence, executive compensation, insufficient progress on board diversity, and overcommitted directors, reflecting our intensified focus on sustainability risks. In the 2020-21 proxy year, BlackRock voted against 255 directors and against 319 companies for climate-related concerns that could negatively affect long-term shareholder value. More detail in respect of BIS’s engagement and voting history can be found at

BIS also publishes voting bulletins explaining its vote decision, and the engagement and analysis underpinning it, on certain high-profile proposals at company shareholder meetings. Vote bulletins for 2021 can be found at

In terms of its own reporting, BlackRock believes that the SASB provides a clear set of standards for reporting sustainability information across a wide range of issues, from labour practices to data privacy to business ethics. For evaluating and reporting climate-related risks, as well as the related governance issues that are essential to managing them, the TCFD provides a valuable framework. BlackRock recognises that reporting to these standards requires significant time, analysis and effort. BlackRock’s 2021 TCFD report can be found at

Fund manager commentary

31 January 2024

Comments from the Portfolio Manager

Please note that the commentary below includes historic information on the Company’s NAV performance and index performance.

The figures shown relate to past performance. Past performance is not a reliable indicator of future results.

During January the Company’s NAV per share retuned by -0.1% to 1,536.43p on a total return basis, while our benchmark index returned -1.6%.1

The UK market fell during January as investors scaled back their expectations of rate cuts from the Bank of England after a surprise increase in UK inflation in December. Consumer prices rose at a rate of 4%, up from 3.8% in November; the first month on month increase in almost a year. Services inflation rose to 6.4% in December from 6.3% in November and core inflation was 5.1% in December, unchanged from the previous month. The release of the consumer confidence index in the UK indicated a rise of three points month-on-month to minus 19; the third consecutive month-on-month increase and a two-year high. Notably, consumer expectations of personal finance for the next 12 months were positive for the first time in two years. January’s purchasing manager index reading indicated economic activity rising at the fastest pace in seven months. In addition, wage growth in the UK slowed to 6.5% in the three months to November, down from a peak of 8.5% in the summer.

Shares in 4imrpint surged after the company announced solid progress through the course of 2023 and as a result upgraded full year guidance. SigmaRoc reported impressive trading with upgrades to full-year guidance despite a reduction in volumes. The company has completed a number of acquisitions throughout 2023 which are integrating well, and in November announced the significant acquisition of CRH’s limestone assets. SigmaRoc management remain confident on their prospects, with ongoing strength in infrastructure and industrial markets and potential for a recovery in residential construction. Defence technology business QinetiQ was another top contributor during the month as their Q3 trading update was received well by the market. The cash flow generation was of particular importance as the company had disappointed the market with poor working capital management at the interim stage.

The largest detractor was Watches of Switzerland. The company issued a profit warning in the month which showed a deceleration in sales in lower/mid-tier watches and jewellery in the UK. More importantly, the company flagged a profit shortfall in the US caused by a change in product mix supply from Rolex, where they received a greater number of lower value steel watches and less high end-end gold watches. Given gold watches can sell at c.3x the price of steel, the impact on ASP (average selling price) for the group was significant and was the primary cause of the downgrade. We continue to like the industry dynamics for luxury watches, however, as a result of these developments we have significantly reduced the position within the portfolio. Mobile commerce business, Bango, warned that full year earnings will be below analyst expectations as a result of lower than expected revenue recognition due to customer launch timings and additional unplanned costs. Shares in Big Technologies fell after the company warned that its electronic tagging contract with a large Columbian based client would be coming to an end during the first half of 2024. Furthermore, investments made during 2023, which are expected to accelerate sales in the medium term, are expected to reduce margins until the new sales are realised.

Since the end of 2021 rising interest rates have been weighing on the valuations of long-duration, higher growth shares in the stock market. As a result, UK small & mid-caps have continued to underperform large caps and we are now in the deepest and longest cycle of underperformance in recent history; worse than the Global Financial Crisis, COVID, Brexit, Tech sell-off or Black Monday. The fourth quarter of 2023 saw markets reflect the expectation of rate cuts in 2024 in response to easing inflation data. However, as we have entered 2024, the backup in bond yields has led to a volatile start to the year in equity markets.

Against this backdrop, the question remains, what is the catalysts for this trend to change? Unfortunately, there is no simple answer. While there are many headwinds to the UK SMID market; economic uncertainty, political uncertainty, the structural flow issues in the UK market, the risk of more pervasive inflation, to name a few, we remind ourselves and take comfort in the fact that many of our holdings continue to deliver against their objectives. Furthermore, we believe we are closer to the end of monetary tightening and at some point, we are confident that investors will decide the balance of probabilities is in favour of the opportunities, that the risks are more than adequately priced in, and that an increased allocation to UK small and mid-caps is warranted.

As ever, we remain focused on the micro, industry level change and stock specific analysis and the opportunities we are seeing today in our universe are as exciting as ever. Historically, periods of heightened volatility have been followed by strong returns for the strategy and presented excellent investment opportunities.

We thank shareholders for your ongoing support.

1Source: BlackRock as at 31 January 2024

Unless otherwise stated all data is sourced from BlackRock as at 31 January 2024.

Any opinions, forecasts represent an assessment of the market environment at a specific time and is not intended to be a forecast of future events or a guarantee of future results. This information should not be relied upon by the reader as research, investment advice or a recommendation.

Risk: Reference to the names of each company mentioned in this communication is merely for explaining the investment strategy and should not be construed as investment advice or investment recommendation of those companies.

Portfolio manager biography

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

Roland Arnold is manager of BlackRock Smaller Companies Trust plc and a member of the UK Equity Team. Mr Arnold has been co-manager of the BlackRock UK Special Situations Fund since August 2012, and manager of Small & Mid Cap UK Equity Portfolios since 2006. Roland’s service with the firm dates back to 2000, including his years with Merrill Lynch Investment Managers (MLIM), which merged with BlackRock in 2006.

Roland Arnold

Portfolio Manager
Roland Arnold

Board of directors

All of the Directors are independent of the management company and are members of the Management Engagement Committee. With the exception of the Chairman all Directors are members of the Audit Committee.

Ronald Gould (Chairman) was appointed to the Board in April 2019 and became chairman of the Company in June 2019. He is currently Chairman of Henderson Far East Income Trust plc, Think Alliance Asia and was previously Chairman of Credo Capital Partners AB, Compliance Science Ltd and a Non-Executive Director of the JPMorgan Asian Investment Trust plc. He was also previously Managing Director and Head of the Promontory Financial Group in China, CEO of Chi-X Asia Pacific, Senior Adviser to the UK Financial Services Authority, CEO of investment bank ABG Sundal Collier and Vice Chairman of Barclays Bank asset management activities.

Susan Platts-Martin (Senior Independent Director) appointed on 21 April 2016, is the Chairman of Baillie Gifford China Growth Trust plc and formerly sat on the Advisory Board of the Barings Targeted Return Fund. She previously acted as Protector of Power to Change Trust. A qualified chartered accountant with 26 years' experience in financial services, she was the first head of investment trusts at Fidelity International, responsible for establishing and growing a successful investment trust business. She has experience of both open and closed ended funds having also been director of product development and head of fund accounting at Fidelity.

Mark Little (Chairman of the Audit Committee) was appointed to the Board on 1 October 2020. He is a non-executive director and also chairs the audit committees of the Majedie Investment Trust Plc and Securities Trust of Scotland Plc and is a non-executive Director and audit committee chairman designate of the Abrdn Equity Income Trust plc. He was also previously Investment Director at Seven Investment Management and a non-executive director (and audit committee chairman) of Sanditon Investment Trust plc as well as a non-executive director for the start-up business UWI Technology and the charity Winning Scotland Foundation. Mr Little has a wealth of experience in the financial services sector, and began his career as a fund manager with Scottish Widows Investment Management after qualifying as a chartered accountant with Price Waterhouse in 1991. He subsequently worked as Global Head of Automotive Research for Deutsche Bank and joined Barclays Wealth in 2005, where he became Managing Director of Barclays Wealth (Scotland and Northern Ireland).

James Barnes was appointed to the Board on 31 July 2021. He is a Non-Executive Director and is also currently the Chairman of Vestey Holdings, the Horticultural Trades Association, Thirlstane Castle Trust and the Crieff Food Company and was previously a Director and Chairman of Dunedin Smaller Companies Trust plc. Mr Barnes was also previously a Director of Dobbies Garden Centres plc; he was instrumental in growing the business and leading its sale to Tesco in 2007. Mr Barnes has a wealth of experience in the financial services and UK smaller companies sector and began his career in corporate finance and investment banking.

Helen Sinclair was appointed to the Board on 1 March 2022. She began her career in investment banking and spent nearly eight years at 3i plc focusing on management buy-outs and growth capital investments. She later co-founded Matrix Private Equity (which became Mobeus Equity Partners) in 2000 and subsequently became Managing Director of the company before moving to take on a number of non-executive director roles. She is a non-executive director of WH Ireland Group plc, Shire Income plc and Sherborne Investors (Guernsey) C Limited and Chairman of Octopus Future Generations VCT PLC. Ms Sinclair was previously Chairman and non-executive director of British Smaller Companies VCT and a non-executive director of Mobeus Income & Growth 4 VCT plc and The Income & Growth VCT plc.

Dunke Afe was appointed to the Board on 1 January 2024 as a Non-Executive Director. She is an accomplished global marketing executive with extensive experience in raising brand awareness, delivering high-impact portfolio strategies and omni-channel marketing campaigns to drive business growth. She has previously worked with top blue chip multinationals including Unilever, Kimberly Clark and Estee Lauder. Ms Afe is also a Non-Executive Director of CT UK Capital and Income Investment Trust plc.

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Investment strategies targeting growth and income
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Over 29 years of proven experience running investment trusts (Dec 2021)
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Unparalleled research capabilities and experienced stock pickers
To get in touch contact us on:
Telephone: 020 7743 3000