Eve Maddock-Jones, Investment Week, 26 September 2022:
For the first time in the history of the FTSE 100, the index features four investment trusts: Scottish Mortgage, 3i, Pershing Square Holdings and F&C…
All four trusts can count themselves as heavyweights of the closed-ended space, for different reasons.
While F&C holds heritage, IT Global peer Scottish Mortgage is the biggest investment trust to date at £15.1bn, with 3i Group not far behind it, running £14.7bn in AUM, according to data from the Association of Investment Companies.
Finally, Pershing Square Holdings is the flagship product of Bill Ackman’s Pershing Square Capital Management. Although it is UK listed, the trust runs in the IT North America sector and is one of the more concentrated portfolios, holding just eight to 12 names.
All four have delivered high levels of outperformance over the long-term, ranking in the top quartile for their respective sectors, according to FE fundinfo data.
With these portfolios now members of the UK’s major index, Investment Week asked several experts which one investors should considering allocating to, with two trusts clear favourites…
For several experts, the giant Scottish Mortgage remained their top pick out of the four…
Scottish Mortgage is the highest-returning portfolio over ten years in the IT Global sector (549.7%), but year-to-date figures drop it to second worst (down 39.6% to the end of August), according to FE fundinfo data.
The trust follows Bailie Gifford’s house style of concentrated, high growth. This method helped many of its portfolios soar in previous years, before dual headwinds of inflation and rising interest rates catalysed a market shift away from growth.
But this did not dampen Khalaf’s bullish sentiment, as he praised Scottish Mortgage’s investment proposition of concentrated allocation to companies with competitive advantages and potential for high future earnings growth, adding that the wider Baillie Gifford team remains strong…
Matthew Read, senior analyst at QuotedData, agreed with Khalaf, adding that “the trashing of growth is probably overdone, at least on a medium-term view”.
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