Scottish Mortgage Investment Trust: record annual return and some candid comments

Scottish Mortgage Investment Trust, the flagship fund managed by Edinburgh-based Baillie Gifford, has recorded its strongest ever annual return for shareholders, more than doubling in value.

Results for the year to the end of March show that net asset value (NAV) per ordinary share rose by just over 111 per cent compared with an increase of 39.6 per cent in the benchmark FTSE All-World Index.

The biggest ever single-year return builds on the strong long-term share price total returns over five and ten years, which stand at 348 per cent and 756 per cent respectively.

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The dividend was increased by 5.2 per cent to 3.42p per share.

Scottish Mortgage Investment Trust, or Smit, managed by Edinburgh-based Baillie Gifford, has recorded its strongest ever annual return for shareholders. Picture: Jon Savage

Justin Dowley, senior independent director, said: “It might perhaps seem insensitive to look forward when the world remains in the grip of the pandemic.

“Nonetheless, it is incumbent on us to be optimistic and look beyond the current crisis. If the last year has taught us anything, it is that the world is uncertain but that we can endure and businesses can flourish in the most challenging of circumstances.”

In March, Baillie Gifford announced that investment veteran James Anderson would be leaving the firm and stepping down as joint manager of 112-year-old Scottish Mortgage – widely known as Smit – at the end of April 2022.

Anderson has been manager of Smit since 2000 and, since 2015, joint manager with Tom Slater, who will continue as manager of the long-established fund.

Writing in the latest managers’ report, Anderson said: “After many years of anodyne reviews perhaps some bluntness is permissible in this final and 22nd version.

“There’s much that I have misunderstood and misjudged over the two decades but my ever-growing conviction is that my greatest failing has been to be insufficiently radical.

“To be blunt: the world of conventional investment management is irretrievably broken. As the world changes so should we.”

Ewan Lovett-Turner at Numis Securities noted: “As always, Scottish Mortgage seeks exposure that is different from the crowd and we can see the potential for the shares to continue to deliver significant growth from its new cohort of holdings – in particular, the interesting collection of unquoted investments which give exposure to areas that cannot be replicated in listed markets.”

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