Alasdair McKinnon has been lead manager since February 2015. He and the other three managers have all been with SIT since at least 2004. McKinnon favours a high-conviction, global contrarian investment approach. He has whittled the portfolio down to 70 holdings, chosen on a bottom-up basis, but ensures it is sufficiently diversified by sector and geographic location to spread investment risk.
At end October the trust’s top 20 holdings accounted for 53.2 per cent of the portfolio. The largest were Australian-based Treasury Wine Estates, Sands China, Microsoft and Rentokil Initial. Companies quoted in the UK accounted for a third of the portfolio, North America for 24.9 per cent and Europe for 14.9 per cent. Gearing ended the year largely unchanged at 5 per cent. Ongoing charges were trimmed to 0.49 per cent.
NAV and share price total returns were 29.4 and 30 per cent respectively, placing SIT in the top quartile of its Global peer group. By way of comparison, total returns on the MSCI AC World index and MSCI UK All Cap indices were 29.1 and 12.3 per cent respectively. With earnings per share up from 15.9p to 21.6p, the regular dividend, which is paid in two tranches, was raised for the 33rd consecutive year, to 13.5p. As SIT’s revenue reserves exceed four times the regular dividend, the directors see no need to add to them, so a special dividend of 9p was also paid.
The board seeks to restrict the discount to 9 per cent in normal market conditions. Nearly 9 per cent of the issued capital was bought back last year at an average discount of 10.6 per cent.
Please click the chart for a larger version.
*with debt at par.
Figures derived from the company's Report and Accounts. Year to 31 October 2016.
Subscribe to Money Observer Magazine
Be the first to receive expert investment news and analysis of shares, funds, regions and strategies we expect to deliver top returns, plus free access to the digital issues on your desktop or via the Money Observer App.Subscribe now