Montanaro Asset Management

We are honoured to be shortlisted for ESG Champion of the Year. It’s always nice to be picked out from the crowd. #ESG #SustainableInvesting #SmallerCompanies #Awards #Montanaro This material is for information purposes only.

📊 Chart of the Week: The decade-long IPO heavyweight bout: US vs Europe 🔗 pfc.ltd/?MTA2MDg #ChartOfTheWeek #Montanaro This material is for information purposes only and does not constitute investment advice or a recommendation to buy or sell any security.

📊 Chart of the Week: Unloved at home: the UK’s share of UK portfolios is now smaller than Europe #UKEquities #ChartOfTheWeek #Montanaro This material is for information purposes only and does not constitute investment advice or a recommendation to buy or sell any security.

🚀It is World Space Week, and space is no longer a frontier to explore. It is fast becoming a place to exploit. Today that means satellite communication, opportunities to improve large scale irrigation projects and environmental monitoring. The future possibilities are endless, in areas like asteroid mining and beamed energy to Earth. Learn more in our Deep Dive: 🔗 pfc.ltd/?NDY1OTI #SpaceWeek #SpaceEconomy #SmallerCompanies #Investing #Montanaro This material is for information purposes only and does not constitute investment advice or a recommendation to buy or sell any security. Capital at risk.

📢 Our 2026 Impact Report is here! 🌍 How are our portfolio companies helping to build a better world? Our ninth annual Impact Report explores the real-world impact of the companies we invest in, from tackling damp and mould in homes and reducing harmful “forever chemicals” to improving healthcare, expanding access to education and supporting the transition to a low-carbon economy. ⚡ This year, we take a closer look at electrification and the vital role of grid infrastructure in enabling a more sustainable future. We also share examples of how our engagement with companies is helping to drive positive change. 🎧 You can also listen to our Impact Report podcast to discover more on page 4. Read the full report here: pfc.ltd/?Mjg5ODE We hope you enjoy it! #ImpactInvesting #SustainableInvesting #BetterWorldFund #ESG #ImpactReport This material is for information purposes only and does not constitute investment advice or a recommendation to buy or sell any security. Capital at risk.

📊 Chart of the Week: Treasury yields are above 5% but 7% may be the real test for US equity valuations Our latest Chart of the Week explores the historical relationship between Treasury yields and US equity valuations. With Treasury yields now above 5%, could 7% be the level that really tests US equity valuations? 🔗 pfc.ltd/?ODM1OTM #ChartOfTheWeek #USMarkets #TreasuryYields #Equities #Valuations #Montanaro This material is for information purposes only and does not constitute investment advice or a recommendation to buy or sell any security. Capital at risk.

It's International Podcast Day. If you missed it, George Cooke, CFA, our CIO, recently appeared on the AJ Bell podcast to talk about the opportunities in European Smaller Companies, and how, in future, they could do some of the heavy lifting in your portfolio. 🔗 Listen to the full conversation here: pfc.ltd/?NzQxMjU #InternationalPodcastDay #EuropeanSmallerCompanies #SmallerCompanies #Investing #Montanaro This material is for information purposes only and does not constitute investment advice or a recommendation to buy or sell any security. Capital at risk.

📊 Chart of the Week: The diversifier that stopped diversifying: Stock-Bond correlation hits a 25Y high For decades, government bonds provided a valuable cushion when equities struggled. That relationship has just broken down. The rolling correlation between the S&P 500 and US Treasuries has risen to +0.41 - its highest level in 25 years. The explanation lies largely with inflation: when inflation, rather than weak growth, is the dominant risk, rising price expectations can push bond yields higher while simultaneously putting pressure on equity valuations. Stocks and bonds can therefore fall together. The traditional 60/40 portfolio is not necessarily dead but investors may need to think more broadly about where genuine diversification comes from. 🔗 pfc.ltd/?ODM1OTM #FixedIncome #AssetAllocation #Diversification #ChartOfTheWeek #Montanaro This material is for information purposes only and does not constitute investment advice or a recommendation to buy or sell any security. Capital at risk.

🏆 We’re proud to share that we have been shortlisted for the "Impact Integration" Award at the 2026 Investors for Purpose Annual Symposium Content Awards. We would like to thank the Investors for Purpose team for the nomination and congratulations to all the other shortlisted firms 👏 You can read our 2025 Impact Report here: pfc.ltd/?NzEzOTI #ImpactIntegration #Symp26 #InvestorsforPurpose #Montanaro This material is for information purposes only and does not constitute investment advice or a recommendation to buy or sell any security. Capital at risk.

📊 Chart of the Week: High yield shrugs off rising rates and private credit stress US high-yield spreads are sitting at just 270bp over Treasuries, well below the long-term median of 422bp. Despite higher rates and growing concerns around private credit, credit markets remain remarkably relaxed. Spreads are also not far from the 228bp record low reached in June 2021. That leaves a notable gap between benign credit pricing today and the risks investors are increasingly discussing. 🔗 pfc.ltd/?ODM1OTM #ChartOfTheWeek #HighYield #CreditMarkets #FixedIncome #BondMarkets #PrivateCredit #Investment #Montanaro This material is for information purposes only and does not constitute investment advice or a recommendation to buy or sell any security. Capital at risk.

We are delighted that Montanaro Asset Management has been shortlisted for ESG Champion of the Year at the Investors' Chronicle Celebration of Investment Awards 2026. Congratulations to all the finalists, and thank you to the judges at Investors' Chronicle. The winner will be revealed at the awards ceremony on 26 November. 🔗pfc.ltd/?MjkyMzM #CelebrationOfInvestment #ESG #Stewardship #SmallerCompanies #Investing #Montanaro This material is for information purposes only and does not constitute investment advice or a recommendation to buy or sell any security. Capital at risk.

'Waiting for the Flames' Ed Heaven looks at the importance of timing in investment. Most investment risks are easy to clock. But as Ed Heaven argues, people tend not to act on them until it’s too late. That’s why he believes it’s so important to rely on your own independent judgement. To truly understand the businesses you invest in. To be an active manager. And avoid getting your fingers burnt. Click to read Ed’s piece here: pfc.ltd/?NTkxMTE #Investment #IndependentResearch #InvestmentStrategy #RiskManagement #LongTermInvesting #Montanaro This material is for information purposes only and does not constitute investment advice or a recommendation to buy or sell any security. Capital at risk.

📊 Chart of the Week: No margin for error: US equities yield little more than Treasuries Our latest Chart of the Week shows the S&P 500's 12-month forward earnings yield at 5.10%, just 25bp above the 10-year Treasury yield of 4.85%. The last time the two sat this close was 2002. Investors are being asked to accept equity risk for almost no additional yield. A premium that thin leaves very little room for earnings to disappoint. 🔗 pfc.ltd/?MTA2MDg #EquityRiskPremium #USEquities #Valuations #ChartOfTheWeek #Montanaro This material is for information purposes only and does not constitute investment advice or a recommendation to buy or sell any security. Capital at risk.

We are celebrating 20 years of managing the Montanaro European Smaller Companies Trust. So a big thank you to all of our shareholders for their support over the years. Watch as Portfolio Manager George Cooke, CFA introduces you to some of the sparkiest companies in Europe in our AGM webinar: pfc.ltd/?MzYyMTQ #EuropeanSmallerCompanies #20 #years #anniversary #InvestmentTrust #Montanaro This material is for information purposes only and does not constitute investment advice or a recommendation to buy or sell any security. Capital at risk.

📊 Chart of the Week: Mind the spread: French bonds now trade wider than the PIIGS Our latest Chart of the Week shows French 10 year government bonds yielding 0.88% more than Germany. The PIIGS, Portugal, Italy, Ireland, Greece and Spain, now sit at just 0.42% over Germany. The two lines crossed in October 2024 and have kept moving apart since. Europe's periphery and its core have swapped places. 🔗 pfc.ltd/?MTA2MDg #Eurozone #Bonds #Spreads #ChartOfTheWeek #Montanaro This material is for information purposes only and does not constitute investment advice or a recommendation to buy or sell any security. Capital at risk.

In case you missed it the first time... 👇 Sit down with Adam Montanaro, ACA CFA, one of our Portfolio Managers, as he talks through the Montanaro UK Smaller Companies Investment Trust (MUSCIT). Joined by Andrew Worne from Cavendish, Adam shares a top-level look at our long-term, quality growth approach, why UK small caps remain such a compelling part of the market, and why the Trust is well positioned today. 🔗Listen to the full interview here: pfc.ltd/?NTcwNTg #MUSCIT #UKSmallCaps #SmallCapInvesting #QualityGrowth #InvestmentTrusts #Montanaro This material is for information purposes only and does not constitute investment advice or a recommendation to buy or sell any security. Capital at risk.

What happened in markets in August? 🌍 Macro • The Fed held rates at 3.50%-3.75%, with three of the twelve members dissenting in favour of a hike 🏦 • The 30-year US Treasury yield hit 5.31%, a 19-year high, prompting a Treasury buyback programme 📈 • A flare-up in Middle East tensions sent oil close to $100 before it settled around $85 🛢️ • Eurozone manufacturing PMI rose to 52.8, its highest in over four years, keeping a September ECB hike in play 🏛️ 📈 Equities • Developed markets ground higher, the MSCI World up 1.9% with the NASDAQ leading at 3.3% 🚀 • Europe lagged at 0.7%, France down 1.7% as rising yields bit, while Germany gained 3.2% 🔄 • Emerging Markets rose 2.7%, but the year is starkly polarised: the index is up 23% YTD while China and India are both down around 9% 🌏 🏢 SmallCaps • Global SmallCaps beat LargeCaps again at 2.3%, with MicroCaps up 4.5% ⚡ • UK SmallCaps stood out, the Numis SmallCap ex-IT up 3.9% against 0.7% for the All-Share, and 11.9% YTD 🇬🇧 • In Europe ex-UK SmallCaps, Energy led at 6.2% and Materials at 4% 🏭 💡 Themes • Cybersecurity was the standout thematic, up 14.2% in the month and 42.6% YTD 🤖 • Semiconductors added 1.3%, extending a year-to-date gain of 61.7% 💻 • Software rebounded sharply as investors concluded AI enhances rather than replaces workflows 🔁 🪙 Commodities & Crypto • Gold rose 8.4% and silver 13.9%, taking silver to 57% YTD 🥇 • Copper gained 1.3% and is now up 37.1% YTD on supply constraints and AI infrastructure demand ⛏️ • Bitcoin rebounded 24.7% in the month but remains down 27.4% YTD ₿ Bottom line: bonds set the tone in August. With the long end of the US curve at a 19-year high and inflation still above target, equity gains had to be earned through earnings rather than cheaper money. Investors rotated towards real assets, smaller companies and the parts of technology with visible demand. The second half of the year now rests on whether yields settle or keep climbing. #Markets #Investing #Equities #SmallerCompanies #Macro #Montanaro This material is for information purposes only and does not constitute investment advice or a recommendation to buy or sell any security. Capital at risk.

📊 Chart of the Week: Real yields reach 15-year highs: can US equity valuations withstand it? Our latest Chart of the Week shows the US 10 year real Treasury yield at 2.2%, back above the 2% line for the first time in roughly 15 years. For much of the past decade, negative or near-zero real rates provided a powerful tailwind for equity valuations. That support has now gone. Yet the S&P 500 still trades on 21.4x forward earnings. Can US equity valuations continue to withstand a world of higher real yields? 🔗 pfc.ltd/?MTA2MDg #RealYields #USEquities #Valuations #ChartOfTheWeek #Montanaro This material is for information purposes only and does not constitute investment advice or a recommendation to buy or sell any security. Capital at risk.