Stock Analysis & Valuation BlackRock Throgmorton Trust plc (THRG.L)

• Previous Close: £657.00
• Sector Valuation Confidence Level: High

Valuation method	Value, £	Upside, %
Artificial intelligence (AI)	963.97	47
Intrinsic value (DCF)	240.34	-63
Graham-Dodd Method	8.85	-99
Graham Formula		n/a

Strategic Investment Analysis

Company Overview

BlackRock Throgmorton Trust plc (THRG.L) is a UK-based closed-ended equity mutual fund managed by BlackRock Investment Management (UK) Limited. Specializing in small and mid-cap UK equities, the fund employs a hybrid top-down and bottom-up investment strategy, focusing on companies with strong management, robust balance sheets, and niche market advantages. The fund also utilizes contracts for difference (CFDs) and equity derivatives to enhance returns. Benchmarked against the Numis Smaller Companies (excluding Investment Companies) Index, BlackRock Throgmorton Trust offers investors exposure to high-growth potential UK equities. With a history dating back to 1962, the fund is a well-established player in the UK asset management sector, appealing to investors seeking diversified exposure to dynamic smaller companies in the British market.

Investment Summary

BlackRock Throgmorton Trust presents an attractive investment opportunity for those seeking exposure to UK small and mid-cap equities with active management from BlackRock. The fund's focus on high-growth potential companies and use of derivatives for enhanced returns could outperform broader indices. However, its high beta (1.39) indicates significant volatility, making it suitable only for risk-tolerant investors. The fund's zero debt position and strong cash reserves (GBp 43.9 million) provide stability, while its 18p dividend per share offers income potential. Investors should weigh the fund's historical performance against the inherent risks of small-cap investing and UK market concentration.

Competitive Analysis

BlackRock Throgmorton Trust's competitive advantage lies in its specialized focus on UK small and mid-cap equities combined with BlackRock's extensive research capabilities and derivative expertise. The fund's ability to use CFDs and equity derivatives provides flexibility not always available to competitors. Its benchmark against the Numis Smaller Companies Index demonstrates a clear niche focus. However, the fund faces competition from both passive small-cap index trackers and actively managed UK equity funds. Its performance depends heavily on stock selection in a market segment known for volatility. The BlackRock brand provides credibility, but the fund's success ultimately hinges on its managers' ability to consistently identify outperforming small-cap companies in the UK market. The zero debt position and cash reserves provide downside protection during market downturns.

Major Competitors

• Scottish Mortgage Investment Trust (SMT.L): Scottish Mortgage is a larger UK investment trust with a global growth focus, contrasting with Throgmorton's UK small-cap specialization. While Scottish Mortgage offers more diversified global exposure, it lacks Throgmorton's small-cap focus and derivative strategies. Both are actively managed but target different market segments.
• Mid Wynd International Investment Trust (MWY.L): Mid Wynd focuses on global growth companies rather than UK small-caps. It shares Throgmorton's active management approach but differs in geographic and market cap focus. Mid Wynd may appeal to investors seeking international diversification rather than concentrated UK exposure.
• Henderson Smaller Companies Investment Trust (HSL.L): Henderson Smaller Companies directly competes with Throgmorton in UK small-cap investing. Both employ active management, but Henderson has a longer track record in this niche. Throgmorton's use of derivatives differentiates it, potentially offering enhanced returns but with additional complexity.
• BlackRock Smaller Companies Trust (BRSC.L): Another BlackRock-managed UK small-cap fund, BRSC competes directly with Throgmorton. Both share BlackRock's research resources but may differ in specific stock selection and strategy. Investors might compare performance histories between these sister funds.