Scottish American had a bad 2014 as its net asset value total return was 2.9% compared to 11.3% for the FTSE All World Index. The discount widened a little and so the return to shareholders was 1.6%. The dividend for the year was 10.5p which is 2.9% higher than for 2013 and was covered almost exactly by earnings of 10.51p.
They shifted more of the portfolio away from bonds and into equities during the year. The fund’s underweight to the US and overweight to the UK was cited as the principal factor behind the portfolio’s return relative to the FTSE All World Index. The net asset value was impacted by a £5.3m increase in the carrying value of the company’s debt (the fair value adjustment). The company’s £80m of debentures are not due to be repaid until 2022.
SCAM : Scottish American held back by US underweight and expensive debt