Securities Trust of Scotland
The Trojan horse
2 December 2020
Securities Trust of Scotland (STS) has had an eventful 2020. Following a competitive selection process, the board appointed Troy Asset Management (Troy AM) as investment manager in September, having served protective notice on Martin Currie in June, following the resignation of former manager Mark Whitehead. The trust is retaining its combined income and long-term capital growth investment objective, while adding a sustainability twist. STS’s board has reset the dividend to what it believes to be a resilient level of 5.5p per share. There will no longer be income derived from writing options, and the board aims to steadily grow the dividend from the set level. Troy AM as a house has an absolute return mindset, so capital preservation is equally important within the revised mandate as income and capital growth at a sustainable pace. MORE »
High-conviction portfolio of quality companies
18 February 2020
Securities Trust of Scotland (STS) aims to generate income and long-term capital growth through a bottom-up approach to investing in global equities. The manager, Mark Whitehead, focuses on quality companies with an ability to sustain dividend growth, to build a relatively concentrated portfolio of 35–55 high-conviction stocks. In his view, this approach is naturally aligned with selecting companies that score highly on ESG issues. Since Whitehead’s appointment, and the adoption of the mandate, STS has delivered an annualised NAV total return of 12.9% and increased demand for its shares the valuation from trading at a persistent discount to trading at a premium to NAV. MORE »
Focused on quality, income and capital growth
20 September 2019
Securities Trust of Scotland (STS) aims to deliver both income and capital growth to shareholders over the long term. Since June 2016, STS has employed an investment mandate that is not constrained by index considerations. The manager, Mark Whitehead, follows a rigorous bottom-up approach to construct a relatively concentrated portfolio of 35–55 high quality, large-cap companies with sustainable earnings and dividend growth. Since the change in the trust’s benchmark on 1 June 2016, STS has delivered an annualised NAV total return of 14.3% to end-August 2019. The board adopts a progressive dividend policy and refreshed the trust’s marketing strategy last year, including the appointment of director, Sarah Harvey, who is a marketing specialist. MORE »
High-conviction global equity income portfolio
26 February 2019
Securities Trust of Scotland (STS) aims to achieve long-term income and capital growth through a fundamental approach to global equity investment. The manager, Mark Whitehead, is not constrained by index considerations and focuses on finding 35–55 high-quality companies with sustainable business models and financial resilience, in which to invest for a three- to five-year horizon. He also utilises the trust’s ability to employ options strategies in a controlled manner to generate additional income. STS’s board adopts a progressive dividend policy and, over the past three years, the annual dividend has increased by 24%. It has also recently refreshed the trust’s marketing strategy, and appointed a new independent director, Sarah Harvey, who has considerable expertise in this area. MORE »
Focused on global growth and quality stocks
26 September 2018
Securities Trust of Scotland (STS) aims to provide long-term growth in income and capital through investing in global equities. The current manager, Mark Whitehead, was appointed in May 2016 and adopted an unconstrained, bottom-up approach to identify high-quality companies that can be long-term structural winners. The portfolio holds a relatively concentrated number of high-conviction stocks, which the manager believes gives the portfolio both defensive characteristics, as well as delivering sustainable dividend growth. The board has a progressive dividend policy. In August 2018, it announced a refresh of the trust’s marketing strategy, materially increasing its budget, and the appointment of a new non-executive director with extensive marketing expertise. MORE »
Investing globally for sustainable dividend growth
28 February 2018
Securities Trust of Scotland (STS) aims to generate rising income and long-term capital growth through investment in quality companies across the globe, with sustainable dividends supported by robust earnings growth. STS appointed a new lead manager in May 2016 and adopted an unconstrained investment approach, allowing the portfolio to reflect the manager’s highest-conviction stock picks in a relatively concentrated portfolio of 35-55 holdings. STS’s performance has since been positive relative to its new peer-based benchmark, while it has a comparable dividend yield of 3.5%, following an increased payout from FY16. It is one of two trusts in the peer group to trade on a discount to cum-income NAV, providing scope for the discount to continue to narrow. MORE »
Investing globally for sustainable dividend growth
28 February 2018
Securities Trust of Scotland (STS) aims to generate rising income and long-term capital growth through investment in quality companies across the globe, with sustainable dividends supported by robust earnings growth. STS appointed a new lead manager in May 2016 and adopted an unconstrained investment approach, allowing the portfolio to reflect the manager’s highest-conviction stock picks in a relatively concentrated portfolio of 35-55 holdings. STS’s performance has since been positive relative to its new peer-based benchmark, while it has a comparable dividend yield of 3.5%, following an increased payout from FY16. It is one of two trusts in the peer group to trade on a discount to cum-income NAV, providing scope for the discount to continue to narrow. MORE »
New manager driving improved performance
29 August 2017
Securities Trust of Scotland (STS) aims to generate rising income and long-term capital growth from a relatively concentrated portfolio of 35 to 55 global equities. Since May 2016, the trust has been managed by Mark Whitehead, who heads up Martin Currie’s income team. A new unconstrained, high-conviction investment approach was adopted on 1 June 2016, with performance measured against a peer group comprising both closed- and open-ended funds. STS has outperformed the peer group since the change in investment strategy. The trust actively uses gearing and has a progressive dividend strategy; its current dividend yield is 3.5%. MORE »
Unconstrained approach driving outperformance
24 February 2017
Securities Trust of Scotland (STS) aims to achieve rising income and long-term capital growth from a concentrated portfolio of large- and mid-cap global equities. Following the move to a higher-yielding and progressive dividend policy in May 2015, from 1 June 2016 STS adopted a new unconstrained, high-conviction investment approach under new manager Mark Whitehead. Performance is now measured versus a peer group of both open and closed-ended funds and in September 2016 gearing was increased from £17m to £25m. The changes appear to be bearing fruit – STS has outperformed its peer group benchmark since the change in investment approach in June 2016. MORE »
New manager and newly unconstrained approach
22 June 2016
Securities Trust of Scotland (STS) has revamped its investment approach, appointing Martin Currie’s income team head Mark Whitehead as lead manager and adopting an unconstrained and high-conviction strategy to meet its objective of producing real growth in capital and income, rather than measuring performance against a backward-looking market index. The more flexible mandate will allow the limited use of options and the gearing facility will be increased. These changes build on a new dividend policy announced by the board last year, which has brought STS’s yield into line with its peer group at more than 4%, and the manager’s focus on quality companies with sustainable earnings may enhance future performance and help to narrow the trust’s discount to NAV. MORE »
Global investment in income and growth
9 March 2016
Securities Trust of Scotland (STS) aims to achieve a combination of rising income and long-term capital growth from a concentrated portfolio of global large- and mid-cap stocks. The board’s revised dividend policy, announced in May 2015, enables the company to deliver more of its returns to shareholders in dividends, while maintaining the investment approach and avoiding a potentially risky move towards higher-yielding stocks; STS now offers a 4.4% yield. Manager Martin Currie has a commitment to income investing, one of its principal strategy types. MORE »
Growth and income from a concentrated portfolio
23 June 2015
Securities Trust of Scotland (STS) seeks a combination of rising income and long-term capital growth from a concentrated (currently 46 stocks) global portfolio of mainly larger companies. Stocks are chosen for attributes including yield and dividend growth, financial strength and valuation. A new policy to enhance the yield, together with the potential for better underlying performance, could see the shares re-rate to a level closer to peers. The shares had moved to a discount to NAV following a spell of lacklustre performance versus the MSCI World High Dividend Yield Index benchmark in 2014, driven by a combination of geopolitical factors and lack of exposure to some large constituents that performed well. MORE »
Finding income and growth, globally
25 November 2014
Securities Trust of Scotland (STS) aims to achieve rising income and long-term capital growth by investing in a relatively concentrated portfolio of mainly large-cap global companies. The portfolio is managed with an emphasis on fundamental stock selection rather than taking a market view (beta neutral). The shares have moved back from the small premium they had traded on previously and offer a yield of over 3% from a geographically diversified portfolio. MORE »
Large-cap equities, focused on dividend growth
4 April 2014
Securities Trust of Scotland (STS) is an investment trust that invests primarily in large-cap global equities targeting both income and capital growth. Stocks are selected using a bottom-up, research-driven investment process and the manager is focused on finding companies that can grow dividends and earnings. Higher yielding global equities (measured by the MSCI World High Dividend Yield Index) have not risen as quickly as the broader market for two years, presenting a potential opportunity. MORE »
New issuance approved
13 September 2013
It has been two years since shareholders passed the resolution to move Securities Trust of Scotland (STS) to a global (previously UK) mandate, with Alan Porter taking over as manager from 1 August 2011. These changes were well received, with the discount narrowing, and the trust has continued to experience strong demand for its shares. As a consequence, the trust has now sought and received approval to issue up to 100m new shares. MORE »
Focus on yield and ability to grow dividends
26 July 2013
Securities Trust of Scotland (STS) is an investment trust that invests primarily in large-cap global equities with an income and growth mandate. The manager seeks to add value through stock selection rather than by making a call on the market. Stock selection is driven by bottom-up fundamental analysis and the manager is focusing on finding companies that can grow dividends and earnings. Current portfolio averages show a prospective gross yield of 4% and dividend per share growth of c 6% over the next 12 months. MORE »
