Scottish Mortgage Investment Trust: A Guide To Investing

Scottish Mortgage Investment Trust is a global portfolio of public and private companies with a simple purpose: to maximise total returns over the long term. The trust is benchmark agnostic, meaning managers can select companies they believe in, providing shareholders with exposure to diverse sectors and industries. Investors can access information on the trust's holdings, performance, and insights via its website and can also sign up for emails to stay updated. Those interested in investing can do so via several fund platforms, with the full list available on the website. Before making any investment decisions, it is essential to independently verify data as prices and trade information provided by external sources may be subject to change.

Share price

The share price of Scottish Mortgage Investment Trust plc (SMT) is shown at the closing mid-price. The share price is higher than the net asset value (NAV) when the trust is trading at a premium, and lower than the NAV when it is trading at a discount. The latest share price information can be found online.

The investment trust adopts an unconstrained approach, with no fixed limits on geographical, industry, or sector exposure. The portfolio is typically held in quoted equities with good liquidity, but investment may also be made in fixed-interest securities, convertible securities, funds, unquoted entities, and other assets. The maximum amount invested in companies not listed on a public market shall not exceed 30% of the total assets of the company.

Scottish Mortgage Investment Trust aims to maximise total returns for shareholders over the long term, typically five years or more. Shareholders should be aware of time horizons when choosing to invest, as volatility is inevitable over such periods. The value of investments can go down as well as up, and past performance is not a guide to future performance.

To buy shares in Scottish Mortgage Investment Trust, you will need to have an account. You can deal for just £11.95 per trade in a Stocks and Shares ISA, Lifetime ISA, SIPP, or Fund and Share Account.

Investment platforms

You can invest in Scottish Mortgage Investment Trust via a number of fund platforms. The investment trust itself does not facilitate direct investment.

Scottish Mortgage Investment Trust is offered on several investment platforms, including Hargreaves Lansdown, where you can trade ordinary shares for £11.95 per trade in a Stocks and Shares ISA, Lifetime ISA, SIPP, or Fund and Share Account.

You can also find a list of available investment platforms on the Scottish Mortgage website, which includes a Platform Matrix. The website also provides a Key Investor Information document, which can be requested free of charge. This document may provide further details on the investment platforms available to you.

It is important to note that the Scottish Mortgage Investment Trust website primarily serves as an informational resource, providing insights, performance updates, and company holdings. Therefore, you will need to utilise one of the listed investment platforms to initiate your investment journey.

Public and private companies

The Scottish Mortgage Investment Trust aims to own the world's most exceptional public and private growth companies. Public and private companies differ in ownership, public disclosure needs, government oversight, and access to capital.

Private companies are owned by a company's founders, management, or a group of private investors. They are under no obligation to disclose information about their operations and financial performance to the public. Private companies have the advantage of being a separate legal entity and have limited liability compared to public companies. They can also keep their finances private and apply for bank loans with lower interest when they require additional funding.

Public companies, on the other hand, have sold a portion of themselves to the public via an initial public offering (IPO) and are traded on public exchanges. They are owned by shareholders, who have a claim to part of the company's assets and profits. Public companies have more access to public markets and can obtain more funding from the public, resulting in more capital raised. They are subject to public disclosure requirements and must publicly share information about their business and financial activities and performance.

While private companies issue stock to existing stockholders or employers, public companies offer shares of their stocks to the public. Private companies may, in some cases, offer shares to their employees or existing investors.

Holdings

Scottish Mortgage Investment Trust (SMT) offers access to a high-conviction, global portfolio of public and private growth companies. The investment trust structure is used to limit fees so that shareholders keep more of the returns generated. The managers of the fund can select the companies they have the highest conviction in, providing shareholders with exposure to a diverse range of sectors and industries.

The fund's holdings are benchmark agnostic, with no fixed limits on geographical, industry, or sector exposure. The portfolio is relatively concentrated, with the number of equity holdings typically ranging between 50 and 100. The major part of the portfolio is held in quoted equities with good liquidity. The fund's top 30 companies can be viewed on the Scottish Mortgage website, with information on each company's investment case. The full portfolio is published with a delay to protect the company's intellectual property.

Scottish Mortgage's holdings include companies in the technology, healthcare, utilities, energy, industrials, financial services, real estate, basic materials, and cyclical sectors. The fund's performance is measured against the FTSE All-World Index, with a goal to achieve greater returns over a five-year rolling period or longer.

The fund's website provides information on its holdings, performance, and insights. It also offers resources such as articles, videos, and a podcast, where managers interview leaders of growth companies.

Performance

The latest share price and performance information for Scottish Mortgage can be found on its dedicated website. The website also provides insights, portfolio information, and the latest news and articles from the Scottish Mortgage team.

The share price and net asset value (NAV) performance of Scottish Mortgage can be compared to its benchmark, the FTSE All-World Index TR. The NAV is calculated with borrowings deducted at fair value for 1, 3, and 5 years and par value for 10 years. If the current share price is above the NAV, the Trust is trading at a premium, meaning it costs more to buy shares than the underlying investments are worth. Conversely, when the share price is below the NAV, it is known as trading at a discount.

Investment in the Trust is predominantly in equities, with the number of equity holdings typically ranging between 50 and 100. The portfolio can be relatively concentrated, and an unconstrained approach is adopted with no fixed limits on geographical, industry, or sector exposure. In addition to equities, investment may also be made in fixed-interest securities, convertible securities, funds, unquoted entities, and other assets based on individual investment cases.

Frequently asked questions