Montanaro European Smaller Companies - Update from QuotedData
6th June 2025
Montanaro European Smaller Companies - Turning tariffs into opportunity: MTE's edge
In an environment of heightened volatility triggered by Trump's tariff policies, European stocks have actually fared relatively well. Germany's plans to boost defence and infrastructure spending, coupled with falling interest rates, helped create more positive sentiment towards the region. Montanaro European Smaller Companies's (MTE's) high-conviction portfolio of good-quality growth stocks seems well placed to navigate this period of uncertainty. Low valuations relative to history enhance the upside potential.
MTE's board has taken steps to enhance shareholder value through regular 5% tender offers (offers to buy back a portion of shares at a fixed price that is usually close to NAV to reduce the discount and provide liquidity to shareholders that wish to exit), a single-digit discount policy, and lower management fees. Against a backdrop where European small cap equities remain significantly undervalued relative to large-cap equities - despite offering superior earnings growth - MTE looks well positioned.
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NB: Marten & Co was paid to produce this note on Montanaro European Smaller Companies Investment Trust Plc, and it is for information purposes only. It is not intended to encourage the reader to deal in the security or securities mentioned in this report. Please read the important information at the back of this note. QuotedData is a trading name of Marten & Co Limited which is authorised and regulated by the Financial Conduct Authority. Marten & Co is not permitted to provide investment advice to individual investors categorised as Retail Clients under the rules of the Financial Conduct Authority.
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