TRUST WATCH: Scottish Mortgage Investment Trust

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SCOTTISH MORTGAGE INVESTMENT TRUST: How backing the stars of the future has paid off handsomely

What is it?

Scottish Mortgage dates back to 1909 and has nothing to do with Scotland or mortgages. 

It aims to outperform world stock market indices over a five-year rolling period, and takes a long-term view on investments.

What does it invest in?

Managed by Baillie Gifford, it invests around the world. Major holdings include Amazon and Netflix, Chinese conglomerates Alibaba and Tencent, and car makers Tesla and Ferrari.

What do the experts like?

Laura Suter, personal finance analyst at AJ Bell, says: ‘The trust gives investors access to some early-stage start-ups and tech companies. 

These holdings have helped to propel returns, with the trust delivering a 57 per cent return over the past three years compared to the index’s 38 per cent return.’

Any downsides?

Although the fund has increased its dividend every year for the past 36 years, the current yield is still quite low so isn’t well-suited for investors seeking an income.

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