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2 March 2017

Scottish Mortgage to join FTSE 100 and cut management fee

Elite Rated Scottish Mortgage Investment Trust is to enter the FTSE 100 index for the first time in its history, as of the close of markets on 17 March 2017. The trust also announced a cut to its annual management fee.

The trust’s ascendance into the UK’s 100 largest firms spelt a major milestone for the company, reflecting years of strong performance. The trust invests internationally, and as with many of the FTSE 100 constituents, Scottish Mortgage benefited from the post-Brexit sterling fall through its various foreign, dollar-denominated investments.

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“Admittance … reflects the trust’s strong investment performance over the past 10 years, in addition to which our assets have grown on the back of the issuance from treasury of over 130 million shares in the past three years,” said John Scott, chairperson of Scottish Mortgage.

“This is testament to the success of our manager’s high conviction approach in owning what we consider to be the world’s most exciting growth businesses. For the trust it brings increased visibility, and for shareholders look to buy or sell it offers increased liquidity.”

The cut in annual management fee, effective as of 1 April 2017, is the result of the company achieving even greater economies of scale in recent years, it said. The flat rate of 0.3% on the first £4bn of assets was already one of the lowest among investment trusts, and now it will fall further to 0.25% on subsequent assets.

Read our research note on Scottish Mortgage Investment Trust

Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. John's views are his own and do not constitute financial advice.