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SCOTTISH MORTGAGE (SMT)

Scottish Mortgage is one of five global trusts run by Baillie Gifford - along with Edinburgh Worldwide, Mid Wynd International, Monks and Scottish American - and is designed as a core holding.
May 5, 2005

Scottish Mortgage is one of five global trusts run by Baillie Gifford - along with Edinburgh Worldwide, Mid Wynd International, Monks and Scottish American - and is designed as a core holding.

Manager James Anderson has performed largely in line with his 50 per cent FTSE All-Share/50 per cent FTSE World excluding UK benchmark, but is now moving from a regional team approach to a more focused global stock-picking style. He is optimistic about the long-term growth prospects of Asia and other emerging markets, and currently has an 18 per cent exposure.

Long-term debt, offset by a bond portfolio, reduces the trust's discount to net asset value (NAV) from 20 per cent to 13 per cent, compared with the sector average of a 15 per cent discount, and a repayment value discount of 12 per cent. Broker Close WINS thinks that the trust is an "attractive holding", noting the board's active share buy-back programme to manage the discount. Around 20 per cent of the trust's shares have been bought back since mid-1999, reducing the proportion of institutional investors to a minority.

Management group: Baillie Gifford

Telephone number: 0131 275 2000

Lead manager: James Anderson (Five years)

Touch: 326-327p5-year NAV performance: £73
Market value: £956mDiscount to NAV: 20%
Dividend yield: 2.3%Gearing: 113%
12-month high: 351pLow: 281p

Year toNet Asset ValueEarningsdividend
31 Marper share (p)per share (p)per share (p)
2004362.88.057.00
2005394.47.377.35
Compound %+9-8+5

Market makers: na

Normal market size: 5,000