Since January 2013, a basket of the 15 biggest Scottish-headquartered firms listed in the FTSE 350 have returned investors 56.1 per cent versus a 30.5 per cent gain for the FTSE 350 Index as a whole. The figures have been calculated by eToro, the multi-asset investment platform, using a simple weighting for the 15 listed stocks.
This outperformance is also there over the last three years - with the basket of Scottish stocks beating FTSE 350 returns by 11.9 per cent. However, the picture changes in the past year, with the Scottish companies underperforming vs the FTSE 350 by 4.6 per cent. Analysts said a key driver of this trend is that ten of the 15 Scottish companies are in the financial services sector - including Royal Bank of Scotland parent NatWest, Abrdn and Virgin Money - all of which have been impacted by recent market volatility.
The figures come ahead of Scotland travelling to Twickenham Stadium to take on England in the Six Nations rugby union championship on February 4.
Ben Laidler, global markets strategist at eToro, said: “Scotland fans will be praying for a third consecutive Six Nations win over England, and for any investors who have heavily backed Scotland’s largest listed firms over the last decade, they may feel they’ve already won. Thanks to the stellar performance of Scotland’s brightest stars in the FTSE 350 - Scottish Mortgage Investment Trust and Smart Metering Systems - the ‘First XV’ of Scotland’s listed companies have provided a healthy return over a long period. However, with Scotland’s firms so heavily focused on the financial sector, a basket of these stocks is heavily influenced by the performance of this sector.”
The Scotland stocks basket was simple weighted - meaning each stock was given equal weight when calculating returns.
According to the study, the largest listed firm based in Scotland is RBS owner NatWest, followed by Perth-based power giant SSE. However, it was the performance of US and tech-focused Scottish Mortgage Investment Trust, and Glasgow-based energy infrastructure company Smart Metering Systems, respectively up 388 per cent and 239 per cent over ten years, that have driven the pack. Meanwhile, other Scottish sectors have not fared particularly well, with Aberdeen energy and engineering services heavyweight Wood down 80 per cent in the past decade, while oil exploration firm Ithaca Energy is down 15 per cent since listing late in 2022, according to the report.
Other firms included in the basket were Edinburgh Investment Trust, Aberforth Smaller Companies Trust, Murray International, Weir Group, Templeton Emerging Markets, Personal Assets Trust and Alliance Trust. In total, Scotland-headquartered firms make up 5 per cent of the total number of large UK listed companies, with a market capitalisation of £1 billion or more. This falls short of the country’s circa 8 per cent contribution to UK gross domestic product (GDP).