Scottish Mortgage Investment Trust PLC (LSE:SMT) reported 16% growth in assets in the first half as it explained how it is embracing investment in new sectors.
Net asset value (NAV) for the FTSE 100-listed fund rose 16% in the six-month period to 30 September, to 1,381.1p per share from 1,195.1p at the end of March, compared with growth of 9% in the FTSE All-World index.
The trust said the broadening of computing technologies continues to change the shape of its portfolio, one example being the growth in its investment in healthcare and biology companies from 11.6% a year ago to 21.4% at present.
Biotechnology companies Moderna and Illumina now make up the two largest holdings in Scottish Mortgage’s portfolio, representing 9.2% and 5.8% respectively of the total portfolio.
Moderna, creator of one of the COVID-19 vaccines, contributed 7.2% to Scottish Mortgage’s performance in the first half, after the fair value of the shareholding rose to £1.94bn on 30 September from £646mln at the end of March.
The trust said that although Moderna’s vaccine has “helped the world to start escaping the tragedies and confinement of the last 18 months”, it is the breadth and scalability of its mRNA technology platform that holds the greatest promise. Moderna’s large and growing pipeline is targeting diseases such as flu, Zika, HIV and cancer.
“We continue to see opportunities for technology platforms to improve resource allocation in the economy across a growing range of areas such as freight, food and finance,” Scottish Mortgage said.
It noted that China’s crackdown on industry regulation has had a negative impact on the investment performance of many of its Chinese companies, which include Tencent, Meituan, NIO and Alibaba - its fifth, seventh, eighth and eleventh largest holdings respectively.
However, the trust said the underlying progress of the companies remains “surprisingly strong”, with Alibaba and Tencent both growing revenue in excess of 20%, while Meituan and Pinduoduo are both growing considerably faster.
“We will continue to assess the long-term implications of the new regulatory approach as they apply to each of our holdings,” it said.
Looking ahead, Scottish Mortgage noted opportunities in the continuing digitisation of the economy, the intersection of information technology and biology and the "much-needed" energy transition.
The trust is upping its interim dividend by 5% to 1.52p per share.
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