Fund Research

Securities Trust of Scotland

Last update 23 January 2019

Securities Trust of Scotland is a client of Kepler Trust Intelligence. Material produced by Kepler Trust Intelligence should be considered as factual information only and not an indication as to the desirability or appropriateness of investing in the security discussed.

Please see the important information by following this link or at the bottom of the page.

Investment objective

Securities Trust of Scotland aims to achieve rising income and long-term capital growth through investment in a balanced portfolio constructed from global equities.

As at:

21/01/2019

Group/Investment

Securities Trust of Scotland

Ticker

STS

Management Company

Martin Currie Investment Management

Association of Investment Companies (AIC) Sector

Global Equity Income

12 Mo Yield

3.77%

Dividend Distribution Frequency

Quarterly

Latest Market Capitalisation

£166,413,142.86

Latest Net Gearing (Cum Fair)

14%

Latest Ongoing Charge Ex Perf Fee %

0.9

Turnover Ratio %

46.29

Shares Outstanding

 104,658,766

(Discount)/ Premium % (Cum Fair)

-6.53

Daily Closing Price

154p

Securities Trust of Scotland (STS) is a broadly diversified global equity income portfolio that aims to deliver a rising level of income and long-term capital growth from a diversified portfolio of equities.

The trust has undergone something of a transformation in recent years, implementing a new progressive dividend policy which allows income to be drawn from capital, and appointing a new manager, ex-Sarasin star Mark Whitehead, who joined Martin Currie as head of income in 2016.

Since he arrived, Mark has built a strong team around himself – including the trust’s former lead manager Alan Porter – and put in place a rigorous investment process which sees potential investments put through a series of ‘tests’ designed to show how they will behave in unpredictable scenarios.

Mark employs an unconstrained, bottom-up approach to stock selection, starting with an investable universe of around 3,000 stocks, paying particular attention to credit analysis and stress testing to identify companies that can demonstrate strong free cashflow, which they believe in turn translates to sustainable dividend growth.

Since Mark’s appointment in 2016, the trust has produced returns largely in line with its peer group benchmark, up until the recent correction which saw the trust lag for stock-specific reasons. The trust offers a solid yield of 3.8% - putting it ahead of the majority of its peers in the AIC Global Equity Income sector in income terms.

At the time of writing, the trust is trading on a discount of -6.53%, well beyond the weighted average discount for the sector (-3.3%), where the large majority of other trusts trade close to par or at a premium, including some which have only marginally outperformed STS over recent years.

William Sobczak

Important information

Securities Trust of Scotland is a client of Kepler Trust Intelligence. Material produced by Kepler Trust Intelligence should be considered as factual information only and not an indication as to the desirability or appropriateness of investing in the security discussed.

Please see the important information by following this link or at the bottom of the page.

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Fund History: Securities Trust of Scotland

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