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Securities Trust of Scotland

New manager driving improved performance

Review | Investment Companies | 29 Aug 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%.

Securities Trust of Scotland

Investing globally for sustainable dividend growth

Review | Investment Companies | 28 Feb 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.

Securities Trust of Scotland

Executive interview - Securities Trust of Scotland

Edison TV: | Investment Companies | 18 Sep 2017

Securities Trust of Scotland (LSE:STS) was launched in 2005. It aims to provide rising income and long-term capital growth through a portfolio of global equities. Following the adoption of an unconstrained mandate, from 1 June 2016 the trust measures its performance versus the rolling three-year median return of open- and closed-ended peers, as well as an absolute target to produce real growth in revenue and cum-income NAV on a rolling five-year basis.

Securities Trust of Scotland

Unconstrained approach driving outperformance

Review | Investment Companies | 24 Feb 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 GBP 17m to GBP 25m. The changes appear to be bearing fruit – STS has outperformed its peer group benchmark since the change in investment approach in June 2016.

Securities Trust of Scotland

New manager and newly unconstrained approach

Review | Investment Companies | 22 Jun 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.

Securities Trust of Scotland

Global investment in income and growth

Review | Investment Companies | 09 Mar 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.

Securities Trust of Scotland

Growth and income from a concentrated portfolio

Review | Investment Companies | 23 Jun 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.

Securities Trust of Scotland

Finding income and growth, globally

Review | Investment Companies | 25 Nov 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.

Securities Trust of Scotland

Large-cap equities, focused on dividend growth

Review | Investment Companies | 04 Apr 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.

Securities Trust of Scotland

New issuance approved

Update | Investment Companies | 13 Sep 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.

Securities Trust of Scotland

Focus on yield and ability to grow dividends

Review | Investment Companies | 26 Jul 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.

Securities Trust of Scotland

Global trust with quarterly dividends

Review | Investment Companies | 09 Jan 2013

Securities Trust of Scotland (STS) is a global growth and income trust that pays quarterly dividends and currently offers a 3.6% yield. Since a change in investment mandate in July 2011, STS invests in high-yield global (previously UK only) equities. During the last 12 months STS has outperformed its benchmark index, the MSCI World High Dividend Yield Index, by 3.5% and 0.2% in terms of price and NAV total return respectively. The fee structure was also simplified with a view to keeping the TER below 1.0%. The manager, Alan Porter, believes that whilst existing uncertainties persist global equity markets are likely to be range bound and the focus remains on stocks with medium growth prospects (the manager defines this as 3-7% three-year forecast dividend growth), strong balance sheets, decent cash flows and dividend growth.