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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