Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

Scottish Mortgage manager pledges fee cut as trust edges towards a premium

Scottish Mortgage manager pledges fee cut as trust edges towards a premium

The £2.9 billion Scottish Mortgage investment trust, is set to cut fees on new shares issued by the trust, whose shares are on the brink of a premium for the first time in more than five years.

'If we are going to issue more shares, we are going to cut the fee. It shouldn't be that managers issue more shares to get more money- that's not the point of the game,' the trust's manager James Anderson said at a presentation at the London Stock Exchange.

Following strong performance, Scottish Mortgage's shares now trade at a 0.8% discount, after operating at a discount as wide as -16.3% in the past five years.

'The fund already has a low on-going charge ratio of 0.51% and this is regarded as a key competitive advantage over other investment vehicles,' Numis analyst Charles Cade said in an investment note.

While analysts were impressed by Anderson's emphasis on issuing shares to reduce volatility and provide liquidity, he added it could be more important that the board 'commits to repurchasing any shares that are issued if the fund subsequently trades back at a discount.'

Over the 10 years to 8 january, the trust's share price has risen 411.1% compared to the AIC sector average return of 281.7%. Its net asset value rose by 334.09% over the same period, according to Morningstar data. 

Anderson, who has returned to manage the trust after a six month sabbatical, was also asked about his future at the group after suggesting in the past he would retire when Scottish Mortgage started trading on a premum.

But the manager extolled the virtues of taking time out, which he used to write a book on growth investing, and said he 'would urge everybody in the room to take six months off'. 

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
When Brewin's Gutteridge met BlackRock's easy Rieder

When Brewin's Gutteridge met BlackRock's easy Rieder

Following Federal Reserve chair Janet Yellen’s testimony, Ben Gutteridge, head of fund research at Brewin Dolphin, grills Rick Rieder, CIO of fundamental fixed income at BlackRock.

Play Sam Vecht: the best opportunities in frontier markets

Sam Vecht: the best opportunities in frontier markets

Blackrock's Vecht evaluates frontier markets and explains where he sees the opportunities

Play Where A-rated Pattullo is finding the best bond opportunities

Where A-rated Pattullo is finding the best bond opportunities

Henderson Global Investors head of retail fixed income explains how he is managing his fund against the surprise current monetary policy divergence.

Your Business: Cover Star Club

Profile: meet the man building Towry into an £11bn giant

Profile: meet the man building Towry into an £11bn giant

As a former engineer who worked on Hong Kong International Airport, Rob Devey is not afraid of taking on major projects

Wealth Manager on Twitter