Winterflood drops Scottish Mortgage and Personal Assets from Global recommendations


Winterflood Investment Trusts has removed the £2.7bn Scottish Mortgage Trust and the £586m Personal Assets Trust from its recommendation list for the global sub-sector.

The Wins recommendation list seeks to highlight the best funds in each sub-sector within closed-ended funds, based on their potential to outperform both their benchmark and peers as well as attractive discount levels.

In its monthly report for July, Wins announces that it has opted to remove both the Scottish Mortgage Trust and Personal Assets and has added the Witan Investment Trust and RIT Capital Partners within the Global sub-sector.

The removal of the Scottish Mortgage Trust comes ahead of a temporary change of management, with manager James Anderson embarking on a six-month sabbatical this month during which time his deputy Tom Slater will take the reins.

Wins says it as been “impressed” by Slater, however it will follow procedure as with all manager changes and remove the fund for a period and keep its performance under review.

Multi-manager trust Witan is recommended following the replacement of some of the active managers in the portfolio for higher alpha managers. Wins says Witan’s external managers “is now very strong and this has coincided with a pick-up in performance”.

The fund has also been one of the best performing global investments trusts this year, according to Wins. It says: “Since Andrew Bell assumed responsibility for Witan in February 2010, the fund’s NAV is up 53 per cent compared with 47 per cent for its benchmark.”

Wins adds that although the trust’s multi-manager approach means Witan is “unlikely to be the best performing global fund for an extended period of time”, it believes the portfolio is currently “well placed to generate alpha”.

RIT Capital Partners has been chosen to replace Personal Assets as a “more interesting prospect”, Wins says. It does credit Personal Assets with “significant success” under the management of Sebastian Lyon and Troy Asset Management.

Wins highlights Lord Rothchild’s “significant personal stake” and involvement with the portfolio management of RIT Capital Partners. It also notes that the fund has strong long-term performance and a diversified portfolio.

Recent performance of the fund has been affected by the portfolio’s defensive positioning over the last few years, which has consequently seen the trust’s discount widen. However Wins describes this as “wide by historic standards and is one of the reasons why we believe it offers an opportunity at present”.