Scottish Investment Trust PLC
Global Equity Income
Rated Fund 2017-19. Portfolio revamp pays off
Scottish Investment Trust has moved into the Global Equity Income asset group from our adventurous Global section, on account of its strong focus on income generation and ample reserves to support rising dividends.
The trust, formed in 1887, has increased its dividend each year for the past 35 years. It produces a respectable yield of 2.7% and pays income quarterly.
Its recent returns were relatively insipid 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 0.52% in 2018. The number of holdings in the portfolio has been reduced to 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 the discount has narrowed from 16% in mid 2016 to less than 10% at the end of 2018.
The portfolio is widely diversified by both industrial sector and 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.
McKinnon’s approach is to analyse companies through a qualitative and quantitative framework in order to identify where companies are in the ‘sentiment cycle’. This includes assessing how much potential exists for further improvement, and whether dividend yields offer an element of downside protection.
Narrative and ratings content all as of 01 January 2019.See all Money Observer rated funds
|Sumitomo Mitsui Financial||3.58 %|
|Glaxo Smith Kline||3.58 %|
|Royal Dutch Shell||3.18 %|
|Newcrest Mining||3.16 %|
|Suncor Energy||2.98 %|
Mark joined the Company in 2000 and became an Investment Manager in 2011. He has 8 years of investment experience. He also has extensive knowledge of the operation of investment trusts, including valuation and performance analytics, from previous roles with the Company. Mark is a CFA charterholder.
Martin joined the Company in 2004 and became Deputy Manager in 2015. He has over 30 years of investment experience. He is a graduate of both Dundee and Edinburgh universities gaining a BSc with Honours in Civil Engineering and a Master of Business Administration, respectively. Martin is a member of the CFA Institute and an Associate of the UK Society of Investment Professionals.
Sarah joined the Company in 2000 and became an Investment Manager in 2002. She has 16 years of investment experience. She graduated with a Master of Business Administration from the University of Edinburgh and previously gained a BA in Commerce. Sarah also has broader investor relations experience and a Post Graduate CIM Diploma in Marketing. Sarah is a member of the CFA Institute.
Igor joined the Company in 2017. He graduated MA with Honours in Economics and Finance and MSc in Petroleum, Energy Economics and Finance, both from the University of Aberdeen.
Data provided by Morningstar.
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