Scottish Mortgage Investment Trust cuts charges


Scottish Mortgage Investment Trust is cutting its ongoing charges by 6 per cent. The charges will drop to 0.45 per cent from 0.48 per cent.

“This figure remains one of the lowest reported in the investment trust sector,” says chairman John Scott, adding that low costs were an important competitive advantage for Scottish Mortgage “given the erosive effect of high costs on compounded returns to shareholders”.

The AIC applauded the investment trust’s move, with Annabel Brodie-Smith, communications director, saying it is “part of a wider trend in the investment company sector”.

Around 25 per cent of investment companies have reduced their management fees to benefit their shareholders since RDR was introduced in 2013,” she says.

The reduced charges were announced in the investment trust’s preliminary annual results.

Scott says the financial year had not been as strong as other years with the trust having a net asset value return of -0.1 per cent and share price return of -0.7 per cent.

“A pleasing outcome of the past 12 months was that good individual company results managed to reverse share prices falls, mitigating broader negative sentiments, which might otherwise have had a greater impact on the portfolio, for example regarding China, healthcare and technology,” Scott says.

Scottish Mortgage also confirms it will take plans to set a 25 per cent limit for unquoted companies held by the trust to a shareholder vote at its AGM on 30 June.

At the end of March private or unquoted companies accounted for 12 per cent of the portfolio, compared to 10 per cent in September.