Page 11 - DIY Investor Magazine | Issue 33

While businesses and consumers face higher costs, they believe the type of firms they hold will remain robust.
Another factor working in investors’ favour is that the UK stock market is still looking undervalued in comparison to other developed markets. International investors have been wary of the UK since the Brexit vote and the uncertainty it produced. However, as the domestic and global economies continue to recover, the low valuations of UK companies and their scope for profit growth are becoming increasingly attractive.
While unexpected obstacles can emerge at any time, such as further Covid-19 variants or geopolitical issues, and these might impact short-term performance, Mercantile’s managers are positive about the future.
They believe the type of medium and smaller companies they focus on are robust and will continue to produce good returns.
CALENDAR YEAR PERFORMANCE, NET OF FEES (%) AS OF 28 FEBRUARY 2022
COMPANY RISK PROFILE
• External factors may cause an entire asset class to decline in value. Prices and values of all shares or all bonds and income could decline at the same time, or fluctuate in response to the performance of individual companies and general market conditions.
• This Company may utilise gearing (borrowing) which will exaggerate market movements both up and down.
• This Company may also invest in smaller companies which may increase its risk profile.
• The share price may trade at a discount to the Net Asset Value of the Company.
• The single market in which the Company primarily invests, in this case the UK, may be subject to particular political and economic risks and, as a result, the Company may be more volatile than more broadly diversified companies.
Companies listed on AIM tend to be smaller and early-stage companies and may carry greater risks than an investment in a Company with a full listing on the London Stock Exchange.
More information on The Mercantile Investment Trust Plc >
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DIY Investor Magazine · Apr 2022