Performance at Month End

3i Smaller Quoted Co's Trust PLC
26 January 2005



3i SMALLER QUOTED COMPANIES TRUST plc

All information is at 31 December 2004 and unaudited.


Performance at month end is calculated on a capital only basis

                                  One      Three     One       Three       Five
                                  Month    Months    Year      Years       Years

Net asset value                   5.3%     15.8%     20.5%     22.1%       -3.2%
Share price                       4.4%     13.1%     31.9%     29.6%       -7.0%
FTSE Small Cap Index (ex IC's)    3.0%      8.5%     13.1%     15.1%        4.0%

Sources:  Merrill Lynch Investment Managers and Datastream.


At month end
Net asset value:                                 253.14p
Share price:                                     208.50p
Discount to NAV:                                   17.6%
Net yield:                                          2.1%

Total assets:                                    £144.3m
Gearing:                                         11.4%
Ordinary shares in issue:                        51,163,523


Ten Largest Sector
Weightings                                                    % of Total Assets

Support Services                                                           14.7
Software & Computer Services                                                9.2
Media & Entertainment                                                       8.1
Leisure & Hotels                                                            7.8
Construction & Building Materials                                           7.7
General Retailers                                                           6.6
Mining                                                                      5.7
Oil & Gas                                                                   4.7
IT Hardware                                                                 4.2
Speciality & Other Finance                                                  4.1
                                                                           ----
Total                                                                      72.8
                                                                           ----

Ten Largest Equity Investments
Company                                                       % of Total Assets

BSS Group                                                                   3.2
Parkdean Holidays                                                           2.7
Aveva Group                                                                 2.5
Brewin Dolphin Holdings                                                     2.3
Dechra Pharmaceuticals                                                      2.3
Blacks Leisure Group                                                        2.2
Holidaybreak                                                                1.9
Chaucer Holdings                                                            1.9
Dicom Group                                                                 1.8
Consolidated Minerals                                                       1.7
                                                                           ----
Total                                                                      22.5
                                                                           ----


Commenting on the markets, Mike Prentis, representing the Investment Manager
noted:

December was a strong month for the Trust and the smallcap market generally. The
Trust's NAV per share rose by 5.3% to 253.1 pence, compared to a 3.0% increase
in the benchmark index. The Trust's share price rose by 4.4% to 208.5 pence.
This was the fourth consecutive month of rises in the smallcap sector, and
indeed January has also started well.

A number of the Trust's existing large, core holdings performed well during the
month. Notable among these is Brewin Dolphin which has finally reached a
satisfactory resolution of the splits fiasco with the FSA. This, combined with
sector consolidation talk, most recently evidenced by the potential bid for
Rensburg by Rathbones, resulted in a very strong performance. BSS also produced
further good results, and Parkdean's shares moved higher on comparison with
prices being paid by private equity firms for caravan parks. Further good
performances were seen from some of the Trust's metals stocks, especially
Consolidated Minerals which provided a good update. Amongst smaller holdings, we
saw some good recoveries in Regent Inns, where a new management team has been
installed.

The Trust's strategy remains to seek out attractive growth companies. New
holdings in the month included Glisten and Centurion Electronics. Glisten
manufactures confectionery such as chocolate covered raisins, cake toppings,
mini eggs and similar products.  It acquired a complementary business making
products such as cereal bars. We were attracted by the management team which
look to be capable of creating further value from the combined business.
Centurion Electronics supply in-car entertainment systems, particularly DVD
players, which are sold mainly as dealer fit accessories. The area, and
Centurion itself,is showing strong growth.

In general, the Trust continues to reduce exposure to sectors supplying the
consumer, and seeks to increase exposure to companies benefiting from greater
business investment and demand. However, good quality, attractively priced
consumer businesses continue to be held within the portfolio and new
opportunities are considered on merit. Following the change of investment
manager to Merrill Lynch Investment Managers ("MLIM"), more of the core holdings
of the MLIM smallcap team will be included within the Trust's portfolio as
opportunities arise.

The Trust has been almost fully invested during December and this has continued
into the rising markets of early January. This is usually a good time of the
year for smallcaps, and the proliferation of trading statements in late December
and early January have been net positive for the Trust's portfolio.

Latest information is available by typing www.mlim.co.uk/its on the internet,
"MLIMINDEX" on Reuters, "MLIM" on Bloomberg or "8800" on Topic 3 (ICV terminal).


26 January 2005



                      This information is provided by RNS
            The company news service from the London Stock Exchange