BlackRock Smaller Companies (BRSC) aims for long-term capital growth through investment in UK small-cap or AIM-listed companies. The manager, Roland Arnold, seeks to identify high-quality companies with strong growth prospects. As we discuss under Performance, BRSC has generated consistently strong returns in recent years, consistently outperforming and generating positive risk-adjusted returns (as measured by the information ratio). Whilst much of 2020 proved relatively challenging, the trust still ended up outperforming over the calendar year and has achieved nearly double the average NAV total returns of the peer group average over the previous five years. Roland looks to ensure his companies meet five key criteria, as discussed under Portfolio. These primarily centre on quality and growth considerations, the two often being symbiotic (Roland believes quality of management, for example, is key in driving business growth). The result is a portfolio of typically c. 120 stocks which Roland believes offer strong growth potential. The investment strategy is focussed on capital growth, however the trust also has a strong dividend record, with ten-year annualised dividend growth of c. 18.2% p.a. As we note under Dividend, this has been reflective of near-equally strong growth in revenue returns achieved. BRSC currently yields c. 1.9%. BRSC currently trades on a discount to NAV of c. 6.1% (as at 04/02/2021), having rapidly narrowed towards the end of 2020. As we discuss under Discount, it was not surprising to us that the discount should narrow rapidly on a more positive market attitude towards UK equities, given BRSC is amongst the largest trusts in the UK small cap sector with liquid shares and a highly diversified shareholder register.