Factsheet: Scottish Investment Trust Ord

Global Growth

Rated Fund 2017-2018. Portfolio revamp pays off

Scottish Investment Trust was formed in 1887. Its returns were relatively insipid in recent years until its current manager, Alasdair McKinnon, took over in February 2015. Since then its performance has improved markedly.

McKinnon has slimmed down the trust's investment management team and cut back on other expenses to bring down its ongoing charges to 0.47 per cent in 2017. The number of holdings in the portfolio has been reduced to just over 50 and McKinnon has adopted a new, contrarian investment approach. He believes that future investment returns are driven by a change in a company's prospects and an accompanying change in perception by the crowd.

There is an active discount control strategy, and we think there is potential for returns to continue to improve under McKinnon, helped by a narrowing discount to net asset value. The discount has narrowed from over 15 per cent in mid 2016 to less than 10 per cent at the end of 2017.

The trust's portfolio is widely diversified both by industrial sector and by geographic location, in order to spread investment risk. However, investments themselves are acquired on the basis of the merits of the individual stocks rather than those of regions, sectors or themes.

Analysts at Winterflood Securities say that McKinnon's approach is to analyse companies through a qualitative and quantitative framework to identify where companies are in the 'sentiment cycle'. This includes assessing potential for further improvement, and whether dividend yields offer an element of downside protection.

Narrative and ratings content all as of 01 January 2018.

See all Money Observer rated funds
Scottish Investment Trust Ord
Scottish Investment Trust (The) PLC
Closed Ended Investment Company
0.47 %
Risk Rating
3 Year Sharpe
3 Year Alpha
3.2 %
3.19669 %
Fund Size
£ 682.37 million
Discount Premium
The Company's objective is to provide investors, over the longer term, with above average returns through a diversified portfolio of international equities and to achieve dividend growth ahead of UK inflation. In order to achieve this objective, the Company invests in an integrated global portfolio constructed through an investment process whereby assets are primarily allocated on the basis of the investment merits of individual stocks rather than that of regions, sectors or themes. The Company's portfolio is actively managed and, as a result, is relatively concentrated and typically will contain 70 to 120 listed international equity investment. The portfolio is widely diversified both by industrial sector and geographic location of investments in order to spread investment risk. The company may not make investments in respect of which there is unlimited liability except that the company may sell index futures for efficient portfolio management purposes.
Holding %
Rentokil Initial PLC 4.30 %
Tesco PLC 4.06 %
Standard Chartered PLC 3.90 %
ING Groep NV 3.80 %
Newcrest Mining Ltd 3.75 %
Gap Inc 3.53 %
Royal Dutch Shell PLC B 3.24 %
Suncor Energy Inc 3.02 %
Sumitomo Mitsui Financial Group Inc 2.95 %
GlaxoSmithKline PLC 2.91 %
Region %
United Kingdom 30.74 %
United States 25.53 %
Eurozone 15.81 %
Japan 9.10 %
Australasia 6.24 %
Sector %
Financial Services 21.52 %
Energy 17.52 %
Basic materials 10.43 %
Consumer Defensive 10.37 %
Industrials 9.12 %
Consumer Cyclical 8.98 %
Healthcare 6.77 %
Technology 6.10 %
Communication Services 5.56 %
Scottish Investment Trust (The) PLC
EH2 4NL, Edinburgh, United Kingdom
Legal Structure
Closed Ended Investment Company


Alasdair McKinnon
Joined 07/18/2014

Data provided by Morningstar.

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