Small cap trust BlackRock Throgmorton (THRG) underperformed its benchmark in the year to November 2025.
Strong operational performances from many holdings were often not reflected in share prices as the small and mid cap sector suffered outflows.
| Share price: 643p | NAV per share: 720.5p |
| Market cap: £482.5m | Discount to NAV: 10.8% |
These were Throgmorton’s last results as a standalone trust ahead of a merger with BlackRock Smaller Companies (BRSC).
Backed by Saba Capital, the deal will consolidate BlackRock Smaller Companies’ position as the largest growth-focused UK Smaller Companies trust.
Trailing the benchmark
Over the year to November 2025, Throgmorton’s net asset value (NAV) and share price rose 0.7% and 6.5% respectively. Both lagged the 10.1% return from the benchmark.
UK small and mid caps continued to lag large caps in a year Whitestone described as ‘probably the most challenging’ of his career.
Performance detractors included Just Group (JUST). A ‘short’ position proved costly after Just received a premium-priced bid from Brookfield Wealth Solutions. And construction materials group Breedon (BREE) was impacted by adverse US weather and softer UK trading.
The largest positive contributor was Alpha Group, whose shares soared following a bid from Corpay (CPAY). Also providing a boost was Chemring (CHG), which benefitted from the outperformance of the aerospace and defence sector.
Despite short-term challenges, Throgmorton’s long-term performance track record remains impressive.
Over the 10 years to November 2025, the fund’s NAV and share price returned 105.1% and 119.8% respectively. The return from the benchmark paled in comparison at 59.6%.
Limited catalysts
Whitestone sees ‘compelling value’ on offer in the UK small and mid cap complex. However, he sees ‘limited positive catalysts in the near term to stem the sector outflows.
‘M&A activity is likely to continue at pace as private equity and corporates take advantage of this backdrop, whilst the broader de-equitisation from company share buyback programmes continues.’
Stronger together
The enlarged BlackRock Smaller Companies will be co-managed by Roland Arnold alongside Whitestone. And Quoteddata sees merit in the merger. As the portfolios have 75% stock overlap, this ‘should make the merger process smooth’.
The management fee is to be cut, lowering the ongoing charges ratio by nearly 20 basis points to 0.63%. This will make the combined trust one of the most cost-effective among its peers. Quoteddata also notes the proposal includes shareholder-friendly measures and removes Saba from the register.
Read the press release here: https://www.blackrock.com/uk/solutions/investment-trusts/our-range/blackrock-throgmorton-investment-trust/trust-information#latest-announcements
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