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Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.

The investment trust is back trading at a premium to NAV as Tesla accelerates

Scottish Mortgage (SMT) 548p

Gain to date: 13.9%

Original entry price: Buy at 481.4p on 18 October 2018

Shares in technology-focused investment trust Scottish Mortgage (SMT) recently hit a nine-month high as it continues to reward our buy call in the wake of a big sell-off last autumn.

The usual premium to net asset value (NAV) status enjoyed by the fund has been restored as investors continue to back the stock picking skills of long-serving manager James Anderson.

This remains a highly concentrated portfolio with around 45 holdings and is focused on capital gains rather than income with a modest dividend yield of 0.6%.

A significant factor in the strong recent performance has been the recovery in US stocks, with the US accounting for more than half the portfolio. In particular, a share price recovery in electric car manufacturer Tesla has helped Scottish Mortgage given it represents 3.7% of the trust’s portfolio.

Tesla, which had been a target for short sellers, has rebounded thanks to higher-than-expected delivery numbers in the second quarter.

SHARES SAYS: Dampened hopes on rate cuts have seen US shares stall but Scottish Mortgage has a long-term investment horizon and continues to be a good buy for an investor operating on a similar time frame.   

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