Latest news with #ScottishMortgage
Yahoo
4 days ago
- Business
- Yahoo
The Trump-Musk spat could have implications for the Scottish Mortgage share price
Since its post-'Liberation Day' low, the Scottish Mortgage Investment Trust (LSE:SMT) share price has recovered 22%. And although it has never quite captured the highs of late 2021, compared to June 2020, it's up 33%. But the trust has stakes in two of Elon Musk's companies — Tesla and Space Exploration Technologies (SpaceX) — that could be affected by Thursday's (5 June) social media spat between the 'first buddy' and President Trump. As the two were publicly trading messages, Tesla's stock tanked 14%. Although the fallout didn't help, I'm sure some of this could have been due to the earlier news that the electric car maker's UK sales were 36% lower in May compared to a year earlier. Okay, the British market accounts for a small proportion of cars sold. But this trend mirrors a similar pattern in other parts of the world. Ironically, it's Musk's close relationship with the US president that's sometimes blamed. At 31 March, Scottish Mortgage's stake in Tesla accounted for 0.8% of the trust's assets. All other things being equal, a 14% fall in the EV maker's stock market valuation would reduce the trust's share price by only 0.11%. More significantly, it has a 7.8% exposure to SpaceX, worth £1.07bn. It's the biggest holding in the trust's portfolio. And Trump's threatened to remove government subsidies and contracts from all of Musk's businesses. Since 2008, the space exploration group has received more than $20bn from NASA and the Department of Defense. But Musk didn't seem too bothered. He posted on X: 'In light of the President's statement about cancellation of my government contracts, @SpaceX will begin decommissioning its Dragon spacecraft immediately'. Of course, this could all blow over soon. All brothers — that's how one US interviewer recently described their relationship — fall out from time to time. But given the ferocity of the exchanges, it's hard to see how. However, despite Scottish Mortgage's exposure to SpaceX, shareholders don't appear concerned. On the day after the public row, its share price was largely unaffected. But that's one of the advantages of an investment trust. Risk is spread across several businesses, often in different countries and industries. Indeed, Scottish Mortgage has holdings in 95 companies operating in five continents. It seeks only to invest in the world's 'exceptional' growth companies. Currently, the shares trade at a 10% discount to its net asset value (NAV). This implies the trust's undervalued. But it has a large exposure (26.2% of assets) to unquoted companies — including SpaceX — which can be hard to value. If the space group's shares were publicly traded, I'm sure they would have plunged on Thursday. But in the absence of an active market of buyers and sellers, it's difficult to accurately measure their value from one day to the next. Having said that, if SpaceX went out of business tomorrow, over £1bn would be wiped off the trust's asset value. But ignoring Musk's businesses, the trust's impressive track record is one reason for long-term growth investors to consider taking a stake. In the 10 years to 30 April, its share price has increased 260% and its NAV has soared by 318%. It benchmarks its performance against the FTSE All-World Index. Over the same period, this increased by 177%. The post The Trump-Musk spat could have implications for the Scottish Mortgage share price appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool James Beard has no position in any of the shares mentioned. The Motley Fool UK has recommended Tesla. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
5 days ago
- Business
- Yahoo
Here's why the Scottish Mortgage share price is back at 1,000p
The Scottish Mortgage Investment Trust (LSE: SMT) share price has risen to £10 again in recent days. This means it's up nearly 50% over the past two years, and 23% since early April. Here, I want to look at what might have fuelled the recent turnaround, and whether it could continue. Scottish Mortgage's focus on disruptive companies more often than not leads it to the tech-packed US stock market, particularly the Nasdaq. Around 61% of the FTSE 100 investment trust's portfolio is in US stocks. Therefore, a recovery in share prices across the pond has underpinned Scottish Mortgage's short-term performance. The Nasdaq is now 28% higher than its April trough. That said, there have also been some notable jumps in a few key holdings. Latin American e-commerce giant MercadoLibre hit an all-time high in early June, as did audio streaming platform Spotify. Indeed, Spotify stock is now up 805% since the start of 2023! While the trust has been selling some Nvidia shares recently, it's still a significant holding (around 2.3% of the portfolio). And the AI chip king has also been on a hot streak, surging 51% since the April sell-off. It should also be noted that the FTSE 100 itself is now just a whisker away from a 52-week high — and therefore a new record. One key theme that Scottish Mortgage has invested in heavily is the digitalisation of global finance. It has called this one of 'the world's most transformative trends'. Key holdings here include MercadoLibre and Nu Holdings (Nubank) in Latin America, Affirm and Stripe (unlisted) in the US, and Sea Limited and Ant Group (unlisted) in Asia. Sea is up 61% this year, while Affirm has rebounded 62% since early April. Somewhat rarely for the trust, it does have a couple of UK-based fintechs in the portfolio. These are money transfer app Wise and neobank Revolut, which is private. The Wise share price jumped close to a record high this week after the firm posted strong annual results. Wise also said it intends to transfer its primary listing to the US, which will allow it to work towards inclusion in major US indexes. Whether the trust keeps rising in the near term is largely dependant on what the US market does. We know Trump's tariffs are hurting the global economy, so this is a risk to American corporate earnings and the value of Scottish Mortgage's portfolio. Investors in the trust need to be prepared to ride out sometimes stomach-churning periods of volatility. On the flip side, the global IPO market is warming back up again (though not in London, unfortunately). Revolut is reportedly preparing for a public listing that could value the company at over $45bn, while Ant Group might list in Hong Kong later this year. These massive IPOs could help boost Scottish Mortgage's net asset value (NAV), assuming they're well-received by investors. It would also help relieve worries about the true value of its unlisted assets. Either way though, I still think Scottish Mortgage shares are worth considering. They're currently trading at an 10.8% discount to NAV, which I think is attractive given the long-term growth potential of the portfolio. The post Here's why the Scottish Mortgage share price is back at 1,000p appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Ben McPoland has positions in MercadoLibre, Nu Holdings, Nvidia, and Scottish Mortgage Investment Trust Plc. The Motley Fool UK has recommended MercadoLibre, Nu Holdings, Nvidia, Sea Limited, and Wise Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Daily Mail
27-05-2025
- Business
- Daily Mail
Scottish Mortgage backs growth as tariffs rock markets
Investment trust Scottish Mortgage says its commitment to finding long-term, growth from disruptive companies should pay off as Donald Trump rattles stock markets. Few companies will be unaffected by changes in the global trading status quo, Scottish Mortgage says, warning the US administration is 'accelerating that moment of reckoning [for the US and global economies]'. Tom Slater (pictured), the trust's investment manager, said: 'Equity markets offer no hiding places in such a landscape. Our task as investors is to seek out businesses with the adaptability to recalibrate and the cultural foundations to withstand disruption.' In spite of global volatility and fragile confidence, the trust said its holdings have performed well, delivering 'quietly impressive operational results'. Revealing its annual results this week, Scottish Mortgage delivered a net asset value return of 11.2 per cent for the year ended 31 March. During the period, the firm's share price return was 6 per cent, beating the FTSE All-World Index's 5.5 per cent return. The results, released on Thursday, do not account for the weeks that have followed Trump's tariff 'liberation day'. After taking a steep tumble after the announcement, Scottish Mortgage shares have since clawed back all the ground lost and are up 4.7 per cent on their 2 April level. Slater said: 'Just after our financial year end, the United States announced sweeping new tariffs on several of its key trading partners. The reaction from markets was immediate and severe. He added: 'We are cautious about leaping to conclusions, but we do not view these developments as transitory. The underlying imbalances in the US and global economy whether in trade, debt accumulation, inequality or political cohesion are increasingly unsustainable.' The trust said its discount to NAV had widened to 9 per cent form a previous 4.5 per cent in the financial year just ended, however it says this is in line with the investment trust sector average of 9.1 per cent. During the year, the trust deployed £132m of new capital in private companies - up from £109.4m during the previous 12 months. Scottish Mortgage said its most promising holdings share a capacity to absorb shocks and 'reorient without losing momentum'. Amazon, its says, is now reaping the benefits of its investment into fulfilment, while Shopify has refocused towards enabling merchants by offloading its logistics infrastructure. Slater said: 'In a world that is becoming more fragmented, more protectionist, and more unpredictable, this kind of organisational flexibility will matter more than ever.' The trust has also been reorienting itself, shifting its AI holdings to target businesses that can benefit from the adoption of AI technology. Slater said: 'Few developments this year were more consequential than the rise of generative AI… AI is not a distant promise. It is driving real operational leverage today.' Scottish Mortgage has decided to cut its holding in Nvidia 'significantly', which was its largest investment at the beginning of the financial year. 'This does not reflect diminished respect for the company. It reflects our long-held discipline: we seek asymmetric outcomes. And at the prevailing valuations, the risk/reward looked more balanced than we prefer,' Slater added. Instead, the trust has added to firms it thinks will benefit from adopting AI into their current operations. It said both Spotify and Meta were large contributors to its returns over the past year, with the latter having embedded AI further into its business model. 'It has many opportunities to drive its revenue growth today using this technology. Last year the company noted an 8 per cent increase in time spent on Facebook as a result of AI driven content recommendations to its users,' Slater said. The trust also invested into chipmaker TSMC. It said: 'compute demand will remain structurally strong as AI moves from the training phase to deployment at scale.'
Daily Mail
25-05-2025
- Business
- Daily Mail
Scottish Mortgage backs growth and warns of no hiding places as Trump's tariffs rattle investors
Investment trust Scottish Mortgage says its commitment to finding long-term, growth from disruptive companies should pay off as Donald Trump rattles stock markets. Few companies will be unaffected by changes in the global trading status quo, Scottish Mortgage says, warning the US administration is 'accelerating that moment of reckoning [for the US and global economies]'. Tom Slater, the trust's investment manager, said: 'Equity markets offer no hiding places in such a landscape. Our task as investors is to seek out businesses with the adaptability to recalibrate and the cultural foundations to withstand disruption.' In spite of global volatility and fragile confidence, the trust said its holdings have performed well, delivering 'quietly impressive operational results'. Revealing its annual results this week, Scottish Mortgage delivered a net asset value return of 11.2 per cent for the year ended 31 March. During the period, the firm's share price return was 6 per cent, beating the FTSE All-World Index's 5.5 per cent return. The results, released on Thursday, do not account for the weeks that have followed Trump's tariff 'liberation day'. After taking a steep tumble after the announcement, Scottish Mortgage shares have since clawed back all the ground lost and are up 4.7 per cent on their 2 April level. Slater said: 'Just after our financial year end, the United States announced sweeping new tariffs on several of its key trading partners. The reaction from markets was immediate and severe. He added: 'We are cautious about leaping to conclusions, but we do not view these developments as transitory. 'The underlying imbalances in the US and global economy whether in trade, debt accumulation, inequality or political cohesion are increasingly unsustainable.' The trust said its discount to NAV had widened to 9 per cent form a previous 4.5 per cent in the financial year just ended, however it says this is in line with the investment trust sector average of 9.1 per cent. During the year, the trust deployed £132m of new capital in private companies - up from £109.4m during the previous 12 months. Scottish Mortgage said its most promising holdings share a capacity to absorb shocks and 'reorient without losing momentum'. Amazon, its says, is now reaping the benefits of its investment into fulfilment, while Shopify has refocused towards enabling merchants by offloading its logistics infrastructure. Slater said: 'In a world that is becoming more fragmented, more protectionist, and more unpredictable, this kind of organisational flexibility will matter more than ever.' The trust has also been reorienting itself, shifting its AI holdings to target businesses that can benefit from the adoption of AI technology. Slater said: 'Few developments this year were more consequential than the rise of generative AI… AI is not a distant promise. It is driving real operational leverage today.' Scottish Mortgage has decided to cut its holding in Nvidia 'significantly', which was its largest investment at the beginning of the financial year. 'This does not reflect diminished respect for the company. It reflects our long-held discipline: we seek asymmetric outcomes. And at the prevailing valuations, the risk/reward looked more balanced than we prefer,' Slater added. Instead, the trust has added to firms it thinks will benefit from adopting AI into their current operations. It said both Spotify and Meta were large contributors to its returns over the past year, with the latter having embedded AI further into its business model. 'It has many opportunities to drive its revenue growth today using this technology. Last year the company noted an 8 per cent increase in time spent on Facebook as a result of AI driven content recommendations to its users,' Slater said. The trust also invested into chipmaker TSMC. It said: 'compute demand will remain structurally strong as AI moves from the training phase to deployment at scale.' Compare the best DIY investing platforms Investing online is simple, cheap and can be done from your computer, tablet or phone at a time and place that suits you. When it comes to choosing a DIY investing platform, stocks & shares Isa, self invested personal pension, or a general investing account, the range of options might seem overwhelming. > This is Money's full guide to the best investing platforms Every provider has a slightly different offering, charging more or less for trading or holding shares and giving access to a different range of stocks, funds and investment trusts. 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Daily Mail
20-05-2025
- Business
- Daily Mail
How 10% of your pension could be forced into risky businesses, by investing expert HOLLY MCKAY
Holly Mackay is the founder of Boring Money, an independent research firm that provides tips and comparison tools to savers and investors. Last week Chancellor Rachel Reeves and 17 pension companies got together to sign what is called the Mansion House Accord. It's a voluntary pact, by which these companies promise to put 10 per cent of pension money they manage into so-called 'private markets' by 2030. This is investing into businesses or projects which are not listed on a stock exchange, and are typically things like infrastructure or property. There's another thing too – 5 per cent of this is to be invested into UK private markets. Hmmm. Let me frame this another way which might feel more relevant to readers. In five years' time, the Government and pension companies have agreed that 10p of every £1 in your pension should be invested in private markets, with 5p of this going to the UK. I have a fundamental problem with the Government trying to influence how my retirement savings are managed. Why should our pension savings be used to deliver Rachel Reeves's growth? Frankly, I'd like my pension money to be invested in whatever will get me the biggest stash when I retire because going to Ibiza, embarrassing my children, finding an inappropriately handsome young tennis coach and drinking fizz for breakfast (only at the weekends, I have my standards) will be very expensive. Private markets have historically been very expensive, illiquid (you can't just sell your stake in a new rail project overnight), extremely hard to track and monitor – and it's a very small market in the UK today. Many readers will be scarred by the Woodford hoopla back in 2019, where one of the UK's most popular funds was effectively suspended (gated) and people couldn't get their money out. At the time of suspension, one-fifth of the money was in illiquid stuff, mostly in unlisted healthcare or biotech companies, which was the source of all the problems. These types of investments can be all hunky-dory when everyone feels good. But when everyone runs for the doors shouting, 'Yikes, Give Me My Money NOW', you can't sell quickly enough to do this. And it goes wrong. Quickly. To be fair, workplace pensions are different creatures and most people trundle along, largely ignoring them, often unaware that the pension is even invested, and there would not be the type of mass exodus demands which we see in the retail world of the more engaged private investor. There are other counter arguments to my opinion. Some argue that whopping big pension firms will be able to negotiate much better prices for these investment opportunities. Some say that there are brilliant companies out there which aren't available on public markets. This is why many like Scottish Mortgage or Edinburgh Worldwide Investment Trust, for example, because you can own a bit of Elon Musk's Space X company through these, which isn't available on general stock markets. And some point to the potentially larger returns from private markets. You can also make the case that all this investment in the UK could create jobs, stimulate growth and boost the economy, which long-term will improve wealth for many. I'm just not sure that someone due to retire in five years' time gives a monkey's about that, and it's a very hard argument for a trustee to prioritise when that concept of 'fiduciary duty' means their single job is to enable me to afford as much tennis coaching as is humanly possible. Not to fix the UK's pallid productivity or weak comparative investment track record. Here's my beef. Money talks. If these opportunities were indeed so great, the money would be flowing there now. Investments get found when they perform well. If the UK looks like a good bet, money will flow irrespective of any Accord. If the UK performs badly, trustees will blame the Government for a lack of pipeline, the Government will blame the pensions companies and amid all the finger pointing, you, me and millions of innocent pension savers will be watching from the sidelines, wondering if we couldn't have made more, more cheaply, if we'd just stayed invested in simpler stuff. Or, dare I say it, in the US. I'm an entrepreneur. I love investing in new things. I want to back growth. But lead the argument with convincing evidence about superior performance and low costs and I'd be much more engaged. Will we solve this problem by shoving Ma and Pa's money this way OR by ensuring that the environment for UK companies allows them to excel and perform? I don't want politicians to tell me where I should invest my money. Full stop.
