Securities Trust of Scotland plc

Global Equity Income

New for 2020. Cautious approach incorporates sustainability factors

Securities Trust of Scotland is the top performer among global equity income investment trusts over the past year. It has joined our Rated Funds for 2020 because of its solid performance profile and strong investment stewardship credentials, which make it a decent option for ethically minded income investors.

What’s more, it has beaten the sector average over three years, with performance picking up substantially since Mark Whitehead was appointed manager in May 2016.

Sustainability is a key part of Whitehead’s bottom-up research process: over the past year he has engaged with all of the companies in the portfolio and actively voted against management resolutions at 23% of voteable meetings, on issues such as egregious executive compensation plans and director elections that he disagreed with. He says: “We find this approach to be an important competitive advantage, as it further increases our understanding of the companies we invest in while ensuring we engage with companies on the most important issues that could have a material impact on their future performance.”

He takes a cautious investment approach focusing on identifying financially robust and sustainable business models that can generate strong cash flows. Consequently, the trust is positioned fairly conservatively with an overweight to more defensive sectors as opposed to lower-quality cyclicals that ostensibly look cheap. The portfolio was made up of 44 companies in 14 countries at the end of 2019. It generates a yield of 3%, with dividends paid quarterly.

Increasing demand for shares in the trust has seen the discount at which they trade narrow from a three-year high of 8% to around the value of underlying assets.

Narrative and ratings content all as of January 2020.

See all Money Observer rated funds
Name
Securities Trust of Scotland plc
Manager
Martin Currie Investment Management Ltd
Type
Closed Ended Investment Company
ISIN
GB00B09G3N23
Sector
Global Equity Income
Launched
28/06/2005
OCF
1.34 %
Risk Rating
4
3 Year Sharpe
0.45
3 Year Alpha
3.02
Yield
3.6 %
Fund Size
£ 195.9 million
NAV
184
Gearing
109
Discount Premium
3
The investment objective of Company is to seek to achieve rising income and long-term capital growth through investing in a balanced portfolio constructed from global equities.
Holding %
Microsoft Corp 6.58 %
Zurich Insurance Group AG 4.74 %
Crown Castle International Corp 4.54 %
Verizon Communications Inc 4.30 %
Taiwan Semiconductor Manufacturing Co Ltd ADR 4.30 %
Samsung Electronics Co Ltd Participating Preferred 4.23 %
Koninklijke DSM NV 4.16 %
Lockheed Martin Corp 4.07 %
SSE PLC 3.68 %
Danone SA 3.35 %
Region %
United States 41.82 %
Eurozone 15.90 %
United Kingdom 13.97 %
Asia - Developed 11.33 %
Europe - ex Euro 8.01 %
Sector %
Technology 16.27 %
Financial Services 14.58 %
Industrials 13.27 %
Consumer Defensive 12.83 %
Communication Services 11.77 %
Basic materials 10.00 %
Healthcare 7.45 %
Name
Martin Currie Investment Management Ltd
Address
EH1 2ES, Edinburgh, United Kingdom
UCITS
No
Legal Structure
Closed Ended Investment Company

Managers

Mark Whitehead
Joined 05/11/2016

Data provided by Morningstar.

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You should be aware that prices may fall as well as rise and that the income derived can go down as well as up. When buying or selling any investment that fluctuates in price or value you may get back less than you invested. Past performance is not necessarily a guide to future performance.