Aberforth Smaller Companies (ASL) invests in UK small-caps. First listed in 1990, the trust utilises a team-based approach and places heavy emphasis on bottom-up stock selection using a disciplined value investment strategy. Whilst the composition of the team has changed since 1990, with all founding members having now departed, this process has remained consistent. As we discuss in performance, since launch ASL has outperformed the benchmark index by c. 2% p.a. The past five years have proven more challenging as value style indices lagged but recent returns have been strong, boosted by the strong rally in value and cyclicals following the announcements around the successful developments of COVID-19 vaccines. Despite this very significant rally in ASL’s NAV in recent months, the managers note that they still observe significant value opportunities within their market and portfolio, as discussed under portfolio. They have continued to operate a ‘value roll’, selling down positions that have rerated higher and moving into more lowly valued opportunities. However, the extreme value dispersions within the market and highly depressed valuations on many constituent stocks towards the end of 2020 have meant that in many instances the managers continue to observe substantial upside from positions despite very significant share price rallies. For the fourth time in ASL’s history the managers introduced gearing in 2020, and this remains in place. As discussed in gearing, this was in response to the extremely negative valuations they were observing over much of 2020. They retain further capacity to expand gearing, and continue to look for opportunities where further deployment may be appropriate. With shares unable to keep up with the NAV rally, the discount has widened again in recent months and now stands at c. 7.8% (as at 14/05/2021).