Professional only
Scottish Mortgage Investment Trust
Oddly enough, Scottish Mortgage Investment trust has no particular focus on Scottish investments and nothing to do with mortgages. Its name stems from its long history, which dates to 1909. These days, the trust typically holds between 50 and 100 companies worldwide, united by their strong growth prospects. The managers have a patient buy-and-hold approach and aim to maximise total returns – i.e. both income and capital growth – for shareholders over the long term. This fund typically has low turnover.
Our Opinion
Fund Managers
Expand
Fund Managers
Close
Tom Slater, Lead Manager Tom Slater is the Manager of the Scottish Mortgage Investment Trust, a role he assumed in 2015 after joining the team as Deputy Manager in 2009. He joined Baillie Gifford in 2000 and became a Partner in 2012. Tom also leads the US Equities Team and is involved in another long-term growth equity strategy. His investment focus includes high-growth companies in both public and private markets. He has worked in Baillie Gifford's Developed Asia and UK Equity teams and holds a BSc in Computer Science with Mathematics from the University of Edinburgh, graduating in 2000.
Lawrence Burns, Deputy Manager Lawrence Burns was appointed Deputy Manager of the Scottish Mortgage Investment Trust in 2021. He joined Baillie Gifford in 2009, became a Partner in 2020, and focuses on transformative growth companies. Lawrence has been a member of the International Growth Portfolio Construction Group since 2012 and manages Vanguard’s International Growth Fund. He also co-manages the International Concentrated Growth and Global Outliers strategies. His experience includes roles in the Emerging Markets and UK Equity teams. Lawrence holds a BA in Geography from the University of Cambridge, where he graduated in 2009.
Tom Slater, Lead Manager Tom Slater is the Manager of the Scottish Mortgage Investment Trust, a role he assumed in 2015 after joining the team as Deputy Manager in 2009. He joined Baillie Gifford in 2000 and became a Partner in 2012. Tom also leads the US Equities Team and is involved in another long-term growth equity strategy. His investment focus includes high-growth companies in both public and private markets. He has worked in Baillie Gifford's Developed Asia and UK Equity teams and holds a BSc in Computer Science with Mathematics from the University of Edinburgh, graduating in 2000.
Read More
Risk
Read more
Back
Fund Performance
Close
Risk
Close
Company Description
Close
Talking Factsheet
Quote from the Fund Manager
We want our shareholders to benefit from the transformational growth opportunities that abound in this era of accelerating change.
Tom Slater
Lead Manager
Investment process
Tom and Lawrence are well known for their style of growth investing. They aim to identify businesses which have the potential to disrupt their own industries, with sustainable business models in excess of five years. As a result, the portfolio tends to have a relatively high allocation to technology companies. They focus on the long-term potential of a business rather than its current value. In their own words, they “own companies rather than rent shares”. The managers also try to avoid forecasting the direction of markets or economies.
Risk
The managers make long term investments in disruptive companies, as well as those with sound business models, which enjoy a competitive advantage. Up to 25% of the portfolio can be invested in unlisted companies. Although this allocation can increase risk, it allows the managers to tap into exciting growth stories at an earlier stage. What’s more, they appear to have a keen eye for these types of investments – recent successes include Dropbox and Spotify.
ESG
ESG - Limited
The trust’s manager, Baillie Gifford, takes an holistic approach to ESG. Rather than setting strict rules and restrictions on investments choices, the managers consider the material impact such factors will have on the long-term sustainability of a company’s business when assessing its investment potential. This means that considerations are made on a case-by-case basis and are factored into the overall investment case for the business, but there is no single process that is applied to every holding.
The strategy does involve a 9-question research framework which looks for specific material ESG issues, to ensure a long-term investment is not undermined by an inherent flaw, though this is looking for stock specific issues rather than broad rules-based investing. The wider investment philosophy focuses a lot on governance, however, and managers always meet company management before investing, and have ongoing engagement with the companies they own.
Gearing
Scottish Mortgage employs strategic gearing. If used correctly, this can enhance returns over the long-term. However, it is worth noting that this can increase volatility in difficult market conditions. The maximum exposure to equities as a percentage of shareholders’ funds typically stands at 120% in normal market conditions. In exceptional conditions, borrowing will not exceed 30%.
In June 2018, Scottish Mortgage Investment trust raised a further £170 million in long-term, fixed-rate unsecured private placement notes. This provides additional long-term financing at the cost of a little under 3% per annum. This decision was taken because Scottish Mortgage’s assets have grown in recent years, which had caused the level of borrowing to fall.
The information, data, analyses, and opinions contained herein (1) include the proprietary information of FundCalibre, (2) may not be copied or redistributed without prior permission, (3) do not constitute investment advice offered by FundCalibre, (4) are provided solely for informational purposes and therefore are not an offer to buy or sell a fund, and (5) are not warranted to be correct, complete, or accurate. FundCalibre shall not be responsible for any trading decisions, damages, or other losses resulting from, or related to, this information, data, analyses, or opinions or their use. The Elite Fund rating is subjective in nature and reflects FundCalibre’s current expectations of future events/behaviour as they relate to a particular fund. Because such events/behaviour may turn out to be different than expected, FundCalibre does not guarantee that a fund will perform in line with its FundCalibre benchmark. Likewise, the Elite Fund rating should not be seen as any sort of guarantee or assessment of the creditworthiness of a fund nor of its underlying securities and should not be used as the sole basis for making any investment decision. FundCalibre disclaims any responsibility for trading decisions, damages or other losses resulting from any use of the Elite Fund rating. All performance data, as well as fund size, OCF, AMC, annual income (historic), share price discount or premium, is sourced directly from FE Analytics, and will change periodically.