Veteran Scottish Mortgage (SMT) manager James Anderson will step down from running the trust in April next year after announcing his retirement.
Anderson will leave Baillie Gifford after 40 years at the firm, and over 20 years managing Scottish Mortgage. Tom Slater, joint portfolio manager since 2015, will continue as lead manager when Anderson retires while Lawrence Burns will become deputy portfolio manager with immediate effect.
The news follows a remarkable period for Scottish Mortgage, which made 110% for investors last year thanks to its big exposure to US and China tech firms like Amazon, Alibaba and Tencent, along with a big weighting towards electric carmaker Tesla, whose share price rose more than six fold in 2020.
Anderson has been one of Tesla founder Elon Musk’s biggest backers in recent years, with the trust having the highest exposure to the firm across the Baillie Gifford fund range in 2020.
1,700% RETURN IN 20 YEARS
Since being appointed manager on the trust on the 1 April 2000, Anderson has delivered a whopping 1,700% return for investors, equivalent to turning a £1,000 investment into £18,000 compared to just £4,440 if invested in the FTSE All World benchmark.
These returns propelled the trust into the FTSE 100, and have made it the 31st biggest company in the UK’s benchmark index.
Shares in Scottish Mortgage were initially marked down 3% to £11.14 in early trade, but this mostly reflected yesterday’s huge sell-off in the tech-heavy Nasdaq index in the US.
INVESTORS SHOULDN’T WORRY
News that Anderson is stepping down could cause some worry to thousands of investors who have made fantastic returns from Scottish Mortgage over the years, but AJ Bell head of active portfolios Ryan Hughes said it’s important for investors to remember how Baillie Gifford works, with its investment process ‘firmly embedded in the team-based approach and experienced investor Tom Slater remaining at the helm’.
Hughes said, ‘For investors, while this announcement may be unsettling, the strength of the team-based approach, long handover period and continuity through Tom Slater shouldn’t result in major concerns.
‘Slater has worked at Baillie Gifford for over 20 years and been a manager on the trust for the last 10 years ensuring that he knows the portfolio inside out. As a result, I expect no change to the approach which should hopefully give investors reassurance that the investment process will remain intact.’
