The trust is an actively managed, low cost investment trust, investing in a fairly concentrated global portfolio. As at 31 December 2016, Scottish Mortgage had total net assets of more than £4bn, making it one of the UK's largest investment trusts.
The managers, James Anderson and Tom Slater run a conviction portfolio of around 70 shares. The result is a portfolio dominated by big holdings in some of the companies involved in the new world of social media, the internet, healthcare, eco-friendly energy and gene therapy.
The top ten holdings account for 48% of the portfolio and include Amazon 10%, Baidu 5% (China's equivalent of Google), Alibaba 5%, Facebook 5%, Tesla Motors 5% and Alphabet (Google) 4%. Some 10% of the portfolio is invested in unquoted companies - Dropbox and airbnb to name a couple I am familiar with.
Some of the largest holdings in the portfolio have recently released strong operational results, showing a re-acceleration of their growth rates. These include Alphabet, Facebook, Amazon, Alibaba, Baidu and Tencent. The long standing common elements contributing to their success include: strong corporate cultures, driven by their founder/managers; a focus on providing what their customers either want or need; and a willingness to invest for the long term to enable them to adapt to, and increasingly to anticipate, their customers' evolving demands.
Scottish Mortgage offers a clear, consistent and simple proposition: a portfolio of long term investments in what the Managers believe to be the best growth businesses, operating in any industry and anywhere around the world.
Over the past ten years, the trust has delivered a return of 286% (second only to Linsell Train). Although this is essentially a global growth trust, it is worth noting it has increased its dividend every year for the past 32 years. However, due to the share price appreciation, the current yield is 0.9% (about the same as an average savings account!).
|3 Yr Chart -v- FTSE All Share Index|
(click to enlarge)
As ever, this article is merely a record of my personal investment decisions and should not be regarded as an endorsement or recommendation - always DYOR!