Scottish Mortgage keeps place in Super 60 after formal review

The review took place following news of the planned retirement of key fund manager James Anderson.  

Scottish Mortgage (LSE:SMT) has kept its place on interactive investor’s‘Super 60’ rated list following a formal review over the planned retirement of key fund manager James Anderson (pictured).

The investment trust, which is listed in the ‘Adventurous’ option within the global equities category in the Super 60 list, was placed under formal review on 19 March 2021 after Baillie Gifford announced that Anderson will leave the firm and step down as co-manager of SMT on 30 April 2022.

Anderson joined Baillie Gifford in 1983 and became a partner four years later. During his tenure he led various teams at the firm and although currently SMT is formally managed on a joint basis with Tom Slater, James has been the “mastermind” for the strategy.

Slater will continue as lead manager of the strategy when James retires and as the next step in the long-term transition plan, Lawrence Burns became deputy manager of the trust with immediate effect (19 March 2021).

Dzmitry Lipski, Head of Funds Research, interactive investor, says: “James Anderson has been indeed a key person that has contributed a lot to the trust’s phenomenal performance by investing in early-stage future global winners such as Alibaba, Amazon and Tesla. However, he will remain with the team for another year and will hand the lead management responsibilities to the experienced investor Tom Slater with whom he has been working with for a long time. This is a clear sign for well-planned transition with the appointment of Lawrence Burns as a deputy manager definitely adding more expertise.

“Lawrence’s name may be new to many shareholders, but he’s an experienced manager at the firm and an ideal fit for Scottish Mortgage. Lawrence is philosophically aligned with the trust: his investment focus is on transformative growth companies and he has co-managed some of our largest international strategies alongside James.

“Then, if we consider Tom and Lawrence as a team, they bring together a wealth of experience that is complementary. Both manage global mandates and portfolios including private companies. Tom is head of the US Equites Team and Lawrence leads international strategies that are focused on investing outside the US. They are both looking forward to working together to deliver excellent long-term returns to shareholders.

“We were also assured that the investment philosophy of the trust will remain unchanged, and the team will continue to follow the same investment process.”

The decision was made in line with our Super 60 methodology - which is monitored continuously for events which include, but are not limited to, extended periods of underperformance and fund manager moves. The interactive investor team conducted a formal in-depth review of the investment process, the shape and quality of the portfolio positioning as well as sustainability of the current yield.

The trust usually holds around 85 holdings, with very high concentration in the top 10 stocks and a strong bias towards the transformational growth theme. The trust also has meaningful exposure to private companies, currently at around 16.6%.

The managers believe that such an approach can result in periods of underperformance but expects to be judged over at least five and preferably 10 years.