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Trust Insider: how Scot Mortgage quietly became the UK's biggest trust
by James Carthew on Apr 01, 2014 at 00:01
The largest position is in Amazon. This was 7.9% of the fund in February but at the end of December it was 9.2%. On 30 January, Amazon announced fourth quarter 2013 revenues behind analyst’s forecasts and the stock price was hit.
Anderson made no mention of this in his subsequent monthly factsheets and does not seem to have been selling the stock, so presumably he sees this as a short-term blip.
I find this reticence a bit frustrating. The factsheets and accounts contain little real insight into the stocks in the portfolio and I find this a bit strange, given the main focus of the fund is on stock-picking.
Even though the fund’s focus is on the long term, a bit of comment on short-term market moves would go a long way to reassuring investors.
The portfolio is constructed without harping back to an index and there are some sizeable sector bets as well as stock-specific ones.
The biggest weighting is to technology and SM is currently riding the wave of enthusiasm for the sector. Apart from Amazon, the top 10 includes gene sequencing company Illumina; Chinese internet stocks Baidu and Tencent; Google; and Salesforce.com.
Off piste asset calls
SM’s asset allocation differs quite markedly from its peer group as well.
There are a number of global funds whose remit requires them to hold a substantial portion of their assets in the UK (like Law Debenture, mentioned above) but SM had just 11% invested in the UK at the end of February and a higher allocation to Asia (20%, most of which was in China) than almost all its peers as well.
The large exposure to China means SM’s overall emerging market exposure is quite high.
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