Scottish Mortgage Trust had a tough year to March 2023, says broker Stifel, with the NAV drop of 17.8% much worse than the FTSE All World Index (£) benchmark's decline of -0.9%.
This has sharpened the focus on the concentrated portfolio of growth companies, which fell sharply, and also the impact of negative revaluations of the unlisted portfolio, which declined 28%.
Managers reiterated a commitment to the existing policy of 30% of assets in unlisteds at the time of investment, adding that over the year 84% of the unlisteds were revalued five times or more.
Having at one time traded at a premium to NAV the shares are now at a 23% discount, which Stifel believes offers some value for contrarian investors though they have to be prepared to invest in a trust which is also running with a relatively high level of leverage (14% of NAV).
“We note that US growth stocks have significantly outperformed value sectors in the past couple of months and if this continues it may boost sentiment towards Scottish Mortgage. Hence, our Positive recommendation.”
Shares fell 0.5% to 617.8p