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.

“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 £4 billion of assets was already one of the lowest among investment trusts, and now it will fall further to 0.25% on subsequent assets.

The views of the author and any people interviewed are their own and do not constitute financial advice. However the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Before you make any investment decision make sure you’re comfortable and fully understand the risks. If you invest in fund or trust make sure you know what specific risks they’re exposed to. Past performance is not a reliable guide to future returns. Remember all investments can fall in value as well as rise, so you could make a loss.