| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 420.76 | -66 |
| Intrinsic value (DCF) | 398.74 | -68 |
| Graham-Dodd Method | 13.47 | -99 |
| Graham Formula | n/a |
Scottish Mortgage Investment Trust PLC (SMT.L) is a premier closed-ended equity mutual fund managed by Baillie Gifford & Co Ltd, with a storied history dating back to 1909. As a UK-domiciled investment trust, it focuses on global public equity markets, targeting high-growth stocks across diversified sectors. The fund employs a rigorous investment strategy, emphasizing strong management, competitive positioning, and long-term growth potential, benchmarked against the FTSE All World Index. Known for its concentrated portfolio of innovative companies, Scottish Mortgage has gained prominence for backing disruptive technologies and transformative businesses, including private equity holdings pre-IPO. With a market cap exceeding £11.6 billion, it remains a cornerstone of growth-oriented investment trusts in the financial services sector, appealing to investors seeking exposure to global tech and biotech leaders.
Scottish Mortgage Investment Trust offers investors a high-growth, high-risk profile, with a concentrated portfolio of global equities, including private holdings. Its performance is closely tied to tech and biotech sectors, reflected in a beta of 1.03, indicating market-correlated volatility. The trust’s FY2024 metrics show robust net income of £1.37 billion and diluted EPS of 0.97p, supported by a dividend yield of 4.24p per share. However, negative operating cash flow (£-62.4 million) and significant leverage (£1.64 billion in debt) pose liquidity risks. While its long-term growth focus and Baillie Gifford’s management are strengths, sector concentration and reliance on unlisted valuations demand caution. Attractive for growth investors, but suitability depends on risk tolerance.
Scottish Mortgage’s competitive edge lies in its aggressive growth strategy and Baillie Gifford’s expertise in identifying disruptive innovators early (e.g., Tesla, Moderna). Unlike traditional asset managers, it emphasizes private pre-IPO investments (20–30% of portfolio), offering unique upside but adding illiquidity risk. Its low-cost structure (no performance fees) and long-term horizon differentiate it from active ETFs. However, the trust faces criticism for overexposure to tech volatility, as seen in 2022’s downturn. Competitors like Alliance Trust or Monks Investment Trust offer more diversified global equity exposure, while SMT’s concentrated bets amplify returns in bull markets but deepen losses in corrections. Its ability to access private markets is a moat, but regulatory scrutiny of unlisted valuations and leverage (17% gearing) are vulnerabilities. Performance hinges on continued tech leadership and IPO pipelines.