Scottish Mortgage Investment Trust PLC (LSE:SMT) delivered a strong first half, with net asset value total return rising 22.9% for the six months to 30 September, well ahead of the FTSE All-World index’s 15.4% gain, thanks to its listed technology holdings.
Analysts at Stifel said the widening 14% share price discount to NAV reflects “nervousness over tech and growth valuations,” but maintained a 'neutral' stance on the stock.
All five of the trust’s biggest contributors were listed names, led by Roblox Corp (NYSE:RBLX), which added 2.1 percentage points to returns after its shares jumped 128%, and Taiwan Semiconductor (NYSE:TSM), up 51% and adding 2 points. The next three were Nvidia Corp (NASDAQ:NVDA, ETR:NVD), MercadoLibre Inc (NASDAQ:MELI) and Cloudflare Inc (NYSE:NET).
Analysts at Stifel said the main drag to performance came from Hong Kong-listed Meituan, which fell 36% and its contribution to absolute performance was -1.4%, followed by private holding Brandtech Group saw its valuation halved, for a -0.6% contribution.
Unlisted investments, making up 26.8% of the portfolio, underperformed sharply, returning just 9.2%. Scottish Mortgage deployed £196 million into seven private firms, including new stakes in Claude AI developer Anthropic and Chinese super app RedNote, but made no disposals.
The average change of the top 10 private company valuations was +9.2% over the 6 months, Stifel noted, with 35% of the portfolio valued 5 times or more and 65% was valued up to 4 times.
Across the listed portfolio there were reductions in holdings such as Amazon, Roblox, Spotify, Meta Platforms, Netflix, Tempus AI, MercadoLibre and Shopify.
"Each has delivered operational progress, often with improved financial performance or renewed investor recognition. These reductions were not driven by any loss of conviction. On the contrary, the managers remain supportive of their long-term potential and in all cases retain meaningful positions," said Stifel.
Leverage of around 11% boosted returns, while the trust continued its aggressive buyback programme, spending £766 million in six months -- £2.6 billion over 18 months -- against its two-year target of at least £1 billion.