Scottish Mortgage Investment Trust PLC (LON:SMIT) said the financial year just ended saw the trust produce the strongest ever annual return for shareholders.
Net asset value (NAV) per ordinary share at the end of March 2021 had risen 111% to 1,195.1p from 567.3p a year earlier; over the same period, the benchmark index against which the trust measures its performance – the FTSE All-World Index (in sterling terms) rose 39.6%.
The board’s statement said the reporting period “was clearly overshadowed by the COVID-19 pandemic” and “the devastating human cost” this inflicted but it was also a period that supercharged the prospect of several companies in its portfolio.
“We could point to Illumina and Moderna who, between them, took only four days to sequence the virus and make a candidate vaccine; online platforms such as Amazon that provided goods to our doors; or Zoom, the video conferencing service that turned into a verb overnight,” the trust said in its full-year results announcement.
The trust’s investment manager tends to invest in growth companies that prefer to plough earnings back into the business rather than pay them out in dividends, as a result of which the trust’s earnings fell to 0.62p from 1.55p the year before.
Despite this, the company has bumped up the dividend by 5.2% to 3.42p, with the company drawing on its capital reserves to finance the distribution to shareholders.
“It might perhaps seem insensitive to look forward when the world remains in the grip of the pandemic. Nonetheless, it is incumbent on us to be optimistic and look beyond the current crisis. If the last year has taught us anything, it is that the world is uncertain but that we can endure and businesses can flourish in the most challenging of circumstances,” said Justin Dowley, the senior independent director on the board.
“Investment opportunities are likely to remain plentiful as companies increasingly use digital tools to revolutionise industries and build a sustainable future. Scottish Mortgage is well placed to give you access to these transformational growth companies. The [investment] managers are known as patient investors with time horizons well aligned to company founders, which is particularly attractive to private company owners who carefully select who they wish to see on their ownership registers.
“We remain confident that Scottish Mortgage merits a place in all portfolios. Shareholders benefit from high-quality managers, with a clearly defined investment philosophy and process, together with independent board oversight. All of this is provided at a cost that the board believes represents genuine value for money,” he added.
Shares in Scottish Mortgage were down 1.2% at 1,065p.