- Fallen growth star loses net 6% trade volumes on AJ Bell
- Terry Smith’s Smithson also an autumn loser so far
- Investors snap up reliable growth and income trusts
Once one of the UK's favourite investment trusts, Scottish Mortgage (SMT) continues to lose backers hand over fist as investors stay wary of private company valuations. Last month, the Baillie Gifford-run trust accounted for nearly 15% of all investment trust sales over the AJ Bell platform.
This was partly offset by buyers (the second most bought trust last month), presumably believing the stock could be in bargain territory following a two-year 56% losing run for the shares.
THREE BIG STOCK DRAGS
In the decade to October 2021, Scottish Mortgage shares chalked-up 10-bagger returns for backers, with the stock surging from 125p to more than £15.
However, a combination of interest rate hikes, fading appetite for higher-risk investments and scepticism over valuations of private-company stakes has left the stock trading at lows not seen since the immediate aftermath of the Covid pandemic.
Scottish Mortgage does not invest in start-ups, preferring large, late-stage companies with an average size of $10 billion and a global footprint. In May, the trust admitted it had 28.6% of its portfolio invested in private companies.
| Top investment trust buys and sells in September |
| Top buys | Top sells |
| City of London | 12.7% | Scottish Mortgage | 14.7% |
| Scottish Mortgage | 8.58% | Smithson | 3.45% |
| Monks | 5.24% | JPMorgan Global G&I | 3.25% |
| JPMorgan Global G&I | 3.56% | Ediston Property | 3.06% |
| Witan | 3.39% | City of London | 2.86% |
| Bankers | 3.34% | Regional REIT | 2.82% |
| Scottish American | 2.91% | Hipgnosis Songs | 2.62% |
| BlackRock Throgmorton | 2.82% | Digital 9 | 2.59% |
| Tritax Big Box | 2.81% | Monks | 2.49% |
| Impax Environmental | 2.69% | Greencoat UK Wind | 2.46% |
| Source: AJ Bell |
Perceived high-quality company investments have also taken a knock, making the Terry Smith-founded Smithson Investment Trust (SSON) the second most-sold trust in September. It has lost going on for 40% since October 2021.
GROWTH AND INCOME POPULAR PICKS
Far more attractive to investors last month were trusts seen as reliable, long-run growth and income return trusts, led by City of London Investment Trust (CTY), making up 12.7% of all trust purchases during September.
Other popular growth and income trusts last month included JPMorgan Growth & Income (JGGI), Witan Investment Trust (WTAN) and Bankers Investment Trust (BNKR). Trades in those three total-return vehicles accounted for more than 10% of trust buy volumes on AJ Bell last month.
Readers can access the most popular stocks, funds, ETFs and investment trusts on the AJ Bell platform, over a day, week and month by clicking here.
Disclaimer: Financial services company AJ Bell referenced in the article owns Shares magazine. The author of the article (Steven Frazer) and the editor of the article (Ian Conway) own shares in AJ Bell. Steven Frazer also owns a personal interest in Scottish Mortgage and Smithson Investment Trust.
