Investment Trusts  

Scottish Mortgage ups dividend after healthcare boost

Scottish Mortgage ups dividend after healthcare boost

Scottish Mortgage Investment Trust has seen its net asset value increase by 16 per cent in the six months to September, driven by investments in healthcare and technology.

In a statement this morning (November 8) the trust said its NAV had increased from 1,195.1p per share to 1,381.1p per share in the period. 

It said six months of data was too short for a meaningful interpretation of the stock price but since the end of March the trust's NAV has risen by 16 per cent compared with 9 per cent for the FTSE All-World index. 

Over 10 years Scottish Mortgage's net asset value per share has increased by 1,072 per cent versus a 275 per cent increase in the index.

The company said although its focus remained on long-term capital appreciation, it was aware that a “small but consistent dividend” was of value to many shareholders and it would pay an interim dividend of 1.52p, an increase of 5 per cent over last year's payment of 1.45p.

The trust had benefitted from upping its investment in healthcare and biology companies from 11.6 per cent a year ago to 21.4 per cent today.

The largest holding, Covid vaccine developer Moderna, has been the greatest contributor to this change, the trust said.

"It has been the long-term and exponential improvements in computing technologies, genomic sequencing and energy storage that continue to strike us as the most important determinates of long-term returns," the trust said in the statement. 

"These long-term trends may be too slow to shape financial news headlines in a single period but they compound over time as they grow in impact.

"Moreover, the powerful trends in computing technologies appear to not just be continuing but broadening in utility and application beyond the narrow remits of consumer internet to industries larger and far more diverse.

"This broadening is slowly being reflected in the changing shape of the portfolio."

It added: "Our largest holding, Moderna has been the greatest contributor to this change, writing what is effectively code in the form of RNA to program human cells.

"Moderna has helped the world to start escaping the tragedies and confinement of the last 18 months. However, it is the breadth and scalability of its mRNA technology platform rather than its Covid vaccine that holds the greatest promise."

The trust said it continued to see opportunities for technology platforms across areas such as freight, food and finance. 

It will also look to benefit from the digitisation of the economy, information technology and biology, and the energy transition.

Launched in 1909, the Scottish Mortgage Investment Trust is Baillie Gifford's flagship investment trust. It's share price is 1,516.84p and it is currently trading at a premium of close to 4 per cent.  

In March, it was revealed that joint manager of the trust, James Anderson, will leave Baillie Gifford in April 2022 after more than two decades running the fund.

Anderson has been the manager of Scottish Mortgage since 2000. Since 2015 he has shared the role with Tom Slater.